Which of the following statement is incorrect in respect of the concept 'depreciation'?
Answer & explanation
Correct answer: option 2
The correct answer is option 2: real expenditure is incurred each year in respect of the depreciation accounted for
Option 1: depreciation is an accounting concept. This is correct.
Option 2: real expenditure is incurred each year in respect to depreciation accounted for. This is incorrect.
Depreciation is an accounting concept. No real expenditure may have actually been incurred each year yet depreciation is annually accounted for.