Which of the following statements is correct about Depreciation?
ADepreciation is provided in the books only when there is profit
BDepreciation is an appropriation of profit
CDepreciation cannot be provided in case of loss in a financial year
DDepreciation is a charge against profit
Correct answer
D. Depreciation is a charge against profit
Explanation
Depreciation is provided as a charge against profits. It is not an appropriation of profit. It is provided irrespective of whether the business is making a loss or a profit. Hence statement B. is a true statement.