A. Calculate the true profit
B. Show the true financial position in the Balance Sheet
C. Provide funds for replacement of fixed assets
D. Both A. and B. above
The main objective of providing depreciation is to find out the true Net Profit or Loss for
an accounting period and to present a true and fair view of the state of affairs of the business.
Providing funds for replacement is only an ancillary objective and not the main objective.]
Correct Answer: Show the true financial position in the Balance Sheet ✔
Last Updated: August 10, 2017