English

Do you agree or disagree with the following statement: By charging depreciation on fixed assets ascertainment of true and fair financial position is possible.

Advertisements
Advertisements

Question

Do you agree or disagree with the following statement:

By charging depreciation on fixed assets ascertainment of true and fair financial position is possible.

Options

  • Agree

  • Disagree

MCQ
True or False
Advertisements

Solution

By charging depreciation on fixed assets ascertainment of true and fair financial position is possible. - Agree

shaalaa.com
  Is there an error in this question or solution?
Chapter 7: Depreciation - Exercises [Page 243]

APPEARS IN

RELATED QUESTIONS

Answer in One Sentence only:

What is a ‘Scrap Value’ of an asset?


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

Method of depreciation that cannot reach to zero value.


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.


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

The amount of depreciation remains constant every year under ______


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

Depreciation is charged on fixed assets.


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

Depreciation need not be charged when business is making losses.


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:

Depreciation is charged on ______ asset.


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 ______.


State the advantages of written down value method of depreciation.


A firm purchased a plant for ₹ 40,000. Erection charges amounted to ₹ 2,000. The effective life of the plant is 5 years. Calculate the amount of depreciation per year under the straight-line method.


Furniture was purchased for ₹ 1,00,000 on 1.7.2016. It is expected to last for 5 years. Estimated scrap at the end of five years is ₹ 10,000. Find out the rate of depreciation under the straight-line method.


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.


Mr. ‘X’ purchased Furniture on 1st October 2015 at ₹ 2,80,000 and spent ₹ 20,000 on its installation. He provides depreciation at 6% under the straight-line method on 31st March 2016. Calculate the amount of depreciation.


Vishal Company, Dhule, purchased Machinery costing ₹ 60,000 on 1st April 2016. They purchased further Machinery on 1st October 2017, costing ₹ 30,000, and on 1st July 2018, costing ₹ 20,000. On 1st Jan 2019, one-third of the Machinery, which was purchased on 1st April 2016, became obsolete and it was sold for ₹ 18,000.
Assume that, company account closes on 31st March every year.
Show Machinery Account for the first three(3) years and pass journal entries for the Third year, after charging depreciation at 10% p.a. on Written Down Value Method.


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.


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.


The Annuity Method is most suitable when:


The Revaluation Method is best suited for which type of assets?


A firm buys a machine that wears out faster in early years but provides greater efficiency initially. Which depreciation method would most accurately reflect this pattern?


Under which method might two identical machines purchased at the same cost show different depreciation expenses in two companies? 


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


Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×