(Answered) Question instructions awhat is the purpose of accounting

Accounting

Question: Instructions: a. What is the purpose of accounting for depreciation?

b. Is the president's proposal within the scope of generally accepted accounting principles? In mating your decision, discuss the circumstances, if any, under which use of the method would be reasonable and those, if any, under which it would not be reasonable.

c. The president wants your advice on the following issues.

1. Do depreciation charges recover or create funds? Explain.

2. Assume that the Internal Revenue Service accepts the proposed depreciation method in this case. If the proposed method were used for stockholder and tax reporting purposes, how would it affect the availability of cash flows generated by operations?

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