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Class 11
Accountancy
Depreciation, Provisions and Reserves
what are the effects of depreciation on profit and...

Question:
What are the effects of depreciation on profit and loss account and balance sheet?

Answer:

Depreciation is charged as expenditure in Profit and Loss account and the depreciation figure is deducted from the value of concerned assets in the assets side of the balance sheet.

In that case, it reduces the profit of the concern;

On the other hand, it reduces the assets side in the balance sheet.
Here, it is worth mentioning that Depreciation is a non - cash expenditure.

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Question:
What are the effects of depreciation on profit and loss account and balance sheet?

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Question:
What are the effects of depreciation on profit and loss account and balance sheet?