Depreciation Accounted for to.? A)Increase the Profit. B)reduce the profit. C)Present Incorrect state of Affairs. D)None of the above.

B is right answer

Depreciation accounted for to recover the cost that is incurred on fixed assets over their useful life. As a result it reduces profit and hence, reduces tax liability.

Note: Depreciation has to be charged completly or partially even if there is loss.

Hence, option B is correct to some extent but not completly.

Depreciation is the systematic allocation of depreciable cost of an asset over its useful life. Depreciation is recorded as an expense and another account Provision/Allowance for Depreciation is credited (Indirect Method). An expense certainly reduces the profit for the period and we all know that profit  is determined after deducting all expenses from revenue. It is, therefore, option B is right. 

Depreciation is charged to P&L account to accumulate reserve to replace the asset after its life span. Since it is a reserve out of profit (even in case of no profits) answer is option B, to reduce profit.

Answer will be 

B

the answel  reduce the profit

Will Reduce Profit 

Depreciation is the non cash expense of the company also it will certainly reduce the profit . So  Options B is the right answer. NB: in Saudi Arabia for Zakat it will added to the profit bcz. it is not real expense.

Answers is B..its reducing Net Profrit