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    Question

    A company acquired a machine for ₹12 lakhs with an

    expected useful life of 6 years and residual value of ₹1.2 lakh. Using the straight-line method, the company charged full year depreciation even if purchased mid-year. What accounting assumption is violated?
    A Accrual Correct Answer Incorrect Answer
    B Consistency Correct Answer Incorrect Answer
    C Matching Correct Answer Incorrect Answer
    D Prudence Correct Answer Incorrect Answer

    Solution

    Charging full depreciation without matching it with actual usage violates the matching concept, which requires cost allocation to the period of benefit.

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