S1: Depreciation is charged on all fixed assets except land. S2: Depreciation is charged on land if it is a freehold land. Which statement(s) is/are correct?
Explanation:
Depreciation is charged on all depreciable fixed assets. Land (specifically freehold land) has an unlimited useful life and is not depreciated. Leasehold land is depreciated over the lease term. S1 is correct, S2 is incorrect.
Explanation:
Prudence ensures conservatism by providing for all foreseeable losses but not anticipating profits. Materiality allows accountants to bypass strict accounting rules for insignificant items. Both are correct.
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