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      Question

      What is the nature of 'Provision for Depreciation' in a

      balance sheet?
      A Asset Account Correct Answer Incorrect Answer
      B Liability Account Correct Answer Incorrect Answer
      C Contra-Asset Account Correct Answer Incorrect Answer
      D Income Account Correct Answer Incorrect Answer
      E Nominal Account Correct Answer Incorrect Answer

      Solution

      It is a contra-asset account that reduces the gross value of a fixed asset to reflect its book value.

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