Multiple choice

If the entry for depreciation on a furniture is made before preparing the Trial Balance in case of trading concerns,

  1. the amount of depreciation would be shown in profit and loss A/c and balance sheet

  2. the amount of depreciation would be shown in profit and loss only

  3. the amount of depreciation would be shown in balance sheet only

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 In this case, the amount of depreciation would be transferred to the debit side of Profit & Loss Account . No further adjustment is necessary, since the concerned asset would appear at the reduced value.

Keep practicing — related questions