Question

According to which concept depreciation is charged on fixed assets?

Answer 1

Answer:

Consistancy concept

Explanation:

Once an accounting method is adopted it should be followed from one accounting period to the rest. There are so many methods in depreciation like straight line method, written down value method etc., mostly the firms follow written down value method. so if any of those one methods is adopted it should be followed for the rest of the accounting period.

Answer 2

Answer:

Matching concept.

Explanation:

We need to match the depreciation cost of the fixed asset against the revenues of the years over which we use it.

Thus, we charge depreciation as an expense to the Profit and Loss A/c.

In other words we according to matching concept of

accountancy we need to match the expenses for corresponding incomes we gained,.

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