English

State whether the following statement is True or False with reasons: Wages paid for installation of Machinery are debited to Wages A/c.

Advertisements
Advertisements

Question

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

Wages paid for installation of Machinery are debited to Wages A/c.

Options

  • True

  • False

MCQ
True or False
Advertisements

Solution

This statement is False.
Wages paid for installation of machinery is nothing but part of cost of machinery only, Therefore, it is to be debited to Machinery A/c. only.
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?


Answer in One Sentence only:

Which account is credited when depreciation is charged?


Answer in One Sentence only:

What is the formula to calculate depreciation by Straight Line Method?


Answer in One Sentence only:

Which account is debited when expenses are paid on installation of Machinery?


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

The type of asset on which depreciation is charged.


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.


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:

The amount of depreciation reduces year after year under ______


Do you agree or disagree with the following statement:

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


Do you agree or disagree with the following statement:

The rate of depreciation depends upon the life of fixed asset.


Complete the following sentence:

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


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


State the advantages of straight-line method of depreciation.


State the limitations of straight-line method of depreciation.


A company purchased a building for ₹ 50,000. The useful life of the building is 10 years and the residual value is ₹ 5,000. Find out the amount and rate of depreciation under the straight-line method.


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.


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.


Correct the following statement and rewrite the statement.

Underwritten down value method depreciation is calculated on the original cost of an asset.


If the cost of the Computer is ₹ 40,000 and depreciation is to be charged at 8% p.a. Calculate the amount of depreciation.


M/s Sitaram and Co Purchased a Machinery on 1st January 2016 for ₹ 2,00,000. The company provides depreciation @ 10% p.a. on Reducing Balance Method on 31st March every year. Calculate Written Down Value of Machinery as of 31st March 2017.


Sameer & Company, Mumbai purchased a Machine worth ₹ 2,00,000 on 1st April 2016. On 1st July 2017, the company purchased an additional Machine for ₹ 40,000.
On 31st March 2019, the company sold the Machine purchased on 1st July 2017 for ₹ 35,000. The company writes off depreciation at the rate of 10% on the original cost and the books of accounts are closed every year on 31st March.
Show the Machinery Account and Depreciation Account for the first three years ending 31st March 2016-17, 2017-18 and 2018-19


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, 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.


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 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:


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?


A factory’s machine remains idle for several months due to maintenance breakdowns. Which method ensures that depreciation is not overcharged during these idle periods?


Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×