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| 1. |
What is the importance of the words 'Per Annum' for charging depreciation on fixed assets? |
| Answer» Solution :When rate of depreciation is given with the WARDS 'PER annum or p.a.', like `10%` per annum or `10%` p.a., then depreciation is charged on the fixed asset only for the period for which the asset is used. HOWEVER, when depreciation rate is without the words 'per annum' then depreciation is charged for the FULL accounting period, irrespective of the date of purchase of TLIE asset. | |