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WAEC Financial Accounting 2007 Question 35

Question 35

Public Sector Accounting

Which of the following bases of accounting does not make allowance for depreciation?

  1. A.Cash basis
  2. B.Accrual basis
  3. C.Matching basis
  4. D.Commitment basis
Show the answer and explanation

Answer: A (Cash basis)

Explanation

Under the cash basis the full cost of an asset is spent when paid, so no depreciation is charged.