हिंदी

State whether the following statement is True or False with reasons: Depreciation need not be charged when business is making losses.

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प्रश्न

State whether the following statement is True or False with reasons:

Depreciation need not be charged when business is making losses.

विकल्प

  • True

  • False

MCQ
सत्य या असत्य
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उत्तर

This statement is False.
Depreciation is an element of cost which is to be calculated/charged irrespective of profit or loss of the business. Also, to find actual profit or loss of the business, it is compulsory to calculate depreciation.
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  क्या इस प्रश्न या उत्तर में कोई त्रुटि है?
अध्याय 7: Depreciation - Exercises [पृष्ठ २४३]

APPEARS IN

बालभारती Book Keeping and Accountancy [English] Standard 11 Maharashtra State Board
अध्याय 7 Depreciation
Exercises | Q 4. 8. | पृष्ठ २४३

संबंधित प्रश्न

Answer in One Sentence only:

Why depreciation is charged even in the year of loss?


Answer in One Sentence only:

What is Fixed Instalment Method?


Write the word/term/phrase which can substitute the following statement:

The period for which the asset remains in working condition.


Write the word/term/phrase which can substitute the following statement:

Expenses incurred for fixation of the new asset to bring it in working condition.


Select the most appropriate answer from the alternatives given below and rewrite the sentence:

Depreciation is charged only on ______ assets.


Select the most appropriate answer from the alternatives given below and rewrite the sentence:

The amount spent on installation of new machinery is a ______ expenditure.


State whether the following statement is True or False with reasons:

The Profit or Loss on sale of fixed asset is ascertained only after charging depreciation.


Do you agree or disagree with the following statement:

Under written down value method the Depreciation curve slopes parallel to 'X' axis.


Complete the following sentence:

The amount spent on installation of Machinery is a ______ expenditure.


Complete the following sentence:

______ is the value which an asset realises at the end of its useful life.


Complete the following sentence:

Depreciation Account is a ______ account.


If the total charge of depreciation and maintenance cost are considered, the method that provides a uniform charge is ______.


A depreciable asset may suffer obsolescence due to ______.


State the limitations of straight-line method of depreciation.


State the advantages of written down value method of depreciation.


An asset is purchased on 1.1.2016 for ₹ 50,000. Depreciation is to be provided annually according to the straight-line method. The useful life of the asset is 10 years and its residual value is ₹ 10,000. Accounts are closed on 31st December every year. You are required to find out the rate of depreciation and give journal entries for first two years.


A manufacturing company purchased on 1st April 2010, a plant and machinery for ₹ 4,50,000 and spent ₹ 50,000 on its installation. After having used it for three years, it was sold for ₹ 3,85,000. Depreciation is to be provided every year at the rate of 15% per annum on the fixed installment method. Accounts are closed on 31st March every year. Calculate profit or loss on sale of machinery.


A boiler was purchased on 1st January 2015 from abroad for ₹ 10,000. Shipping and forwarding charges amounted to 12,000. Import duty ₹ 7,000 and expenses of installation amounted to ₹ 1,000. Calculate depreciation for the first 3 years @10% p.a. on diminishing balance method assuming that the accounts are dosed 31st December each year.


Raj & Co purchased a machine on 1st January 2014 for ₹ 90,000. On 1st July 2014, they purchased another machine for ₹ 60,000. On 1st January 2015, they sold the machine purchased on 1st January 2014 for ₹ 40,000. It was decided that the machine be depreciated at 10% per annum on the diminishing balance method. Accounts are closed on 31st December every year. Show the machinery account for the years 2014 and 2015.


A machine costing ₹ 23,000 is estimated to have a life of 7 years and the scrap value is estimated at ₹ 2,000 at the end of its useful life. Find out the amount of depreciation p.a.


M/s Omkar Enterprise Jalgaon acquired a Printing Machine for ₹ 75,000 on 1st Oct 2015 and spent ₹ 5,000 on its transport and installation. Another Machine for ₹ 45,000 was purchased on 1st Jan 2017. Depreciation is charged at the rate of 20% on Written Down Value Method, on 31st March every year.
Prepare Printing Machine Account for the first four years.


Mahesh Traders Solapur purchased Furniture on 1st April 2014 for ₹ 20,000. In the same year on 1st, Oct. additional Furniture was purchased for ₹ 10,000.
On 1st Oct. 2015, the Furniture purchased on 1st April 2014 was sold for ₹ 15,000 and on the same day, a new Furniture was purchased for ₹ 20,000.
The firm charged depreciation at 10% p.a. on the Reducing Balance Method.
Prepare Furniture Account and Depreciation Account for the year ending 31st March 2015, 2016, and 2017.


On 1st April 2015, Suman Traders purchased Machinery for ₹ 30,000. On 1st Oct. 2015, they purchased further Machinery costing ₹ 20,000.
On 1st Oct. 2016, they sold the Machine purchased on 1st April 2015 for ₹ 18,000 and brought another Machine for ₹ 15,000 on the same date.
Depreciation is provided on Machinery @ 20% p.a. on the Diminishing Balance Method and the financial year closes on 31st March every year.
Prepare the Machinery Account and Depreciation Account for the year 2015-16, 2016-17, and 2017-18.


On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.


M/s Omkar Enterprise Jalgaon acquired a Printing Machine for 75,000 on 1 Oct 2015 and spent 5,000 on its transport and installation. Another Machine for 45,000 was purchased on 1st Jan 2017. Depreciation is charged at the rate of 20% on the Written Down Value Method, on 31st March every year.

Prepare Printing Machine Account for the first four years.


M/s Omkar Enterprise Jalgaon acquired a Printing Machine for ₹ 75,000 on 1 Oct 2015 and spent ₹ 5,000 on its transport and installation. Another Machine for ₹ 45,000 was purchased on 1st Jan 2017. Depreciation is charged at the rate of 20% on Written Down Value Method, on 31st march every year.

Prepare Printing Machine Account for the first four years.


A company uses a method that results in high depreciation expense initially and lower in later years. This pattern benefits them because:


The Sum-of-the-Years’-Digits Method results in:


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