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प्रश्न
State the advantages of written down value method of depreciation.
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उत्तर
Following are the advantages of the written down value method.
- Equal charge against income:
In the initial years depreciation is high and repair charges are low. When the asset becomes older, the amount of depreciation charged is less but repair charges are high. Hence, the total burden on profit in respect of depreciation and repairs put together remains almost similar year after year. - Logical method:
In the earlier years, when the asset is more productive, high depreciation is charged. In the later years when the asset becomes less productive, the depreciation charge is less.
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संबंधित प्रश्न
Write the word/term/phrase which can substitute the following statement:
The type of asset on which depreciation is charged.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
Depreciation is charged only on ______ assets.
State whether the following statement is True or False with reasons:
Depreciation increases the value of the asset.
Do you agree or disagree with the following statement:
The rate of depreciation depends upon the life of fixed asset.
Depreciation is to be calculated from the date when ______.
From the following particulars, give journal entries for 2 years and prepare machinery account under straight-line method of providing depreciation:
Machinery was purchased on 1.1.2016
Price of the machine ₹ 36,000
Freight charges ₹ 2,500
Installation charges ₹ 1,500
Life of the machine 5 years
Correct the following statement and rewrite the statement.
Underwritten down value method depreciation is calculated on the original cost of an asset.
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 charges of 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.
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 charges of 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.
Which depreciation method helps a firm accumulate funds for replacing an asset after its useful life?
