Evaluate the consequences of depreciation charged on the historical cost of the assets. I) depreciation is calculated on the original cost of fixed assets, the resulting figure under accumulated depreciation will be only the amount equivalent to the original costof the asset. I) If depreciation is calculated as per historical accounting, sufficient funds will not be available for assets' replacement when its life is over. III) the replacement cost of the asset will be more than the original cost of inflation so that replacement provisions made by the way of depreciation charge on the original cost will be insufficient. IV) the conventional system of accounts based on historical cost does not give a true and fair view of the business enterprise. Statements I, Il and IV b. Statements I, I| |II and IV Statements I, Il and II Statements II, III and IV

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Evaluate the consequences of depreciation charged on the historical cost of the assets.
I) depreciation is calculated on the original cost of fixed assets, the resulting figure under accumulated
depreciation will be only the amount equivalent to the original costof the asset.
II) If depreciation is calculated as per historical accounting, sufficient funds will not be available for assets'
replacement when its life is over.
III) the replacement cost of the asset will be more than the original cost of inflation so that replacement
provisions made by the way of depreciation charge on the original cost will be insufficient.
IV) the conventional system of accounts based on historical cost does not give a true and fair view of the
business enterprise.
a.
Statements I, Il and IV
b.
Statements I, II II and IV
C.
Statements I, Il and II
d.
Statements II, IIl and IV
Transcribed Image Text:Evaluate the consequences of depreciation charged on the historical cost of the assets. I) depreciation is calculated on the original cost of fixed assets, the resulting figure under accumulated depreciation will be only the amount equivalent to the original costof the asset. II) If depreciation is calculated as per historical accounting, sufficient funds will not be available for assets' replacement when its life is over. III) the replacement cost of the asset will be more than the original cost of inflation so that replacement provisions made by the way of depreciation charge on the original cost will be insufficient. IV) the conventional system of accounts based on historical cost does not give a true and fair view of the business enterprise. a. Statements I, Il and IV b. Statements I, II II and IV C. Statements I, Il and II d. Statements II, IIl and IV
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