Depreciation is
A provision
A reserve
Both of the above
None of these
Regards
Solution:-
Depreciation is a Provision. Option A is correct.
Provision for depreciation is the collected value of all the depreciation. In this case, depreciation charged on various assets are accumulated in a reserve and is named as "Provision for depreciation". Provision for depreciation account is the liability of business and therefore is shown in the credit column of trial balance.
Provision for Depreciation Account is prepared for crediting depreciation. When this account is prepared assets appear at its original value in the books of accounts.
Depreciation is a Provision. Option A is correct.
Provision for depreciation is the collected value of all the depreciation. In this case, depreciation charged on various assets are accumulated in a reserve and is named as "Provision for depreciation". Provision for depreciation account is the liability of business and therefore is shown in the credit column of trial balance.
Provision for Depreciation Account is prepared for crediting depreciation. When this account is prepared assets appear at its original value in the books of accounts.