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Theory Base of Accounting — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountTheory Base of Accounting3 Marks
Question
How does the Matching Principle apply to depreciation?
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Answer

According to the Matching Principle, the expenses for an accounting period are matched against related revenues for the determination of profit. On account of this principit, the purchase price of the fixed asset is not taken but only depreciation on fixed asset related to the accounting period is taken.

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