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Which of the following statements is/are false? I. The terms ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning. II. Provision for depreciation A/c is debited when provision for depreciation A/c is created. III. The main purpose of charging the profit and loss A/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.
  • a)
    Only I) above
  • b)
    Only II) above
  • c)
    Only III) above
  • d)
    All I) II) and III) above
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Which of the following statements is/are false? I. The terms ‘de...
False Statement Explanation:

Statement II: Provision for depreciation A/c is debited when provision for depreciation A/c is created.
- This statement is false because when the Provision for Depreciation Account is created, it is credited, not debited. The provision for depreciation is a contra asset account, so it reduces the value of the asset in the balance sheet.
Therefore, only II) above is false.
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Community Answer
Which of the following statements is/are false? I. The terms ‘de...
Because depreciation have debit balance so it not have cr balance
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Which of the following statements is/are false? I. The terms ‘depreciation’, ‘depletion’ and ‘amortization’ convey the same meaning. II. Provision for depreciation A/c is debited when provision for depreciation A/c is created. III. The main purpose of charging the profit and loss A/c with the amount of depreciation is to spread the cost of an asset over its useful life for the purpose of income determination.a)Only I) aboveb)Only II) abovec)Only III) aboved)All I) II) and III) aboveCorrect answer is option 'B'. Can you explain this answer?
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