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Question
Answer in One Sentence only:
Why depreciation is charged?
Solution
Depreciation is charged to find out the true amount of profit or loss in a particular accounting period and to arrive at the true value of the asset.
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Answer in One Sentence only:
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On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
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