Commerce Exam  >  Commerce Tests  >  Accountancy Class 11  >  Test: Depreciation Accounting - 4 - Commerce MCQ

Test: Depreciation Accounting - 4 - Commerce MCQ


Test Description

30 Questions MCQ Test Accountancy Class 11 - Test: Depreciation Accounting - 4

Test: Depreciation Accounting - 4 for Commerce 2024 is part of Accountancy Class 11 preparation. The Test: Depreciation Accounting - 4 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Depreciation Accounting - 4 MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Depreciation Accounting - 4 below.
Solutions of Test: Depreciation Accounting - 4 questions in English are available as part of our Accountancy Class 11 for Commerce & Test: Depreciation Accounting - 4 solutions in Hindi for Accountancy Class 11 course. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free. Attempt Test: Depreciation Accounting - 4 | 30 questions in 30 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 11 for Commerce Exam | Download free PDF with solutions
Test: Depreciation Accounting - 4 - Question 1

A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be 5 years and scrap value at Rs.10000. The production plan for the next 5 years using the above machine is as follows:

 

Q.The depreciation expenditure for the 2nd year under units-of-production method will be

Detailed Solution for Test: Depreciation Accounting - 4 - Question 1

Total unit of production for 5 year is
5000+10000+12000+20000+25000=72000

depreciation by unit method = (cost - scrap value)/ total*year of unit produced

D.p. value = (100000-10000)/72000*10000=12,500 option b is answer

Test: Depreciation Accounting - 4 - Question 2

A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be 5 years and scrap value at Rs.10000. The production plan for the next 5 years using the above machine is as follows:

 

Q.The depreciation expenditure for the 3rd year under units-of-production method will be

1 Crore+ students have signed up on EduRev. Have you? Download the App
Test: Depreciation Accounting - 4 - Question 3

A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be 5 years and scrap value at Rs.10000. The production plan for the next 5 years using the above machine is as follows:

 

Q.The depreciation expenditure for the 4th year under units-of-production method will be

Test: Depreciation Accounting - 4 - Question 4

A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be 5 years and scrap value at Rs.10000. The production plan for the next 5 years using the above machine is as follows:

 

Q.The depreciation expenditure for the 5th year under units-of-production method will be

Test: Depreciation Accounting - 4 - Question 5

Consider the following information:

I. Rate of depreciation under the written down method = 20%.
II. Original cost of the asset = Rs.1,00,000.
III. Residual value of the asset at the end of useful life = Rs.40,960.

 

Q.The estimated useful life of the asset, in years, is 

Detailed Solution for Test: Depreciation Accounting - 4 - Question 5

The estimated useful life of the asset can be calculated using the formula:


Estimated Useful Life = (Original Cost - Residual Value) / Depreciation Rate


Given:


Rate of depreciation under the written down method = 20%


Original cost of the asset = Rs.1,00,000


Residual value of the asset at the end of useful life = Rs.40,960


Calculation:


Depreciation Rate = 20%


Original Cost = Rs.1,00,000


Residual Value = Rs.40,960


Estimated Useful Life = (Original Cost - Residual Value) / Depreciation Rate


Estimated Useful Life = (1,00,000 - 40,960) / 0.20


Estimated Useful Life = 59,040 / 0.20


Estimated Useful Life = 2,95,200


Answer:


The estimated useful life of the asset is 2,95,200 years.


Note: The given answer choices are not provided correctly. The correct estimated useful life is not one of the options given.

Test: Depreciation Accounting - 4 - Question 6

Consider the following information:

I. Rate of depreciation under the written down method = 20%.
II. Original cost of the asset = Rs.1,00,000.
III. Residual value of the asset at the end of useful life = Rs.40,960.

 

Q.Depreciation for 1st year = 

Detailed Solution for Test: Depreciation Accounting - 4 - Question 6


Given:


I. Rate of depreciation under the written down method = 20%.


II. Original cost of the asset = Rs.1,00,000.


III. Residual value of the asset at the end of useful life = Rs.40,960.


Formula:


Depreciation = (Original cost - Residual value) x Rate of depreciation


Calculation:


Depreciation for 1st year = (Original cost - Residual value) x Rate of depreciation


Depreciation for 1st year = (1,00,000 - 40,960) x 20%


Depreciation for 1st year = 59,040 x 20%


Depreciation for 1st year = 11,808


Therefore, the depreciation for the 1st year is Rs. 11,808 (Option A).

Test: Depreciation Accounting - 4 - Question 7

Consider the following information:

I. Rate of depreciation under the written down method = 20%.
II. Original cost of the asset = Rs.1,00,000.
III. Residual value of the asset at the end of useful life = Rs.40,960.

 

Q.Depreciation for 2nd year = 

Detailed Solution for Test: Depreciation Accounting - 4 - Question 7

To calculate the depreciation for the 2nd year, we can use the written down method. The formula for depreciation under the written down method is:
Depreciation = (Original Cost - Residual Value) × Rate of Depreciation
Given Information:
- Rate of depreciation under the written down method = 20%
- Original cost of the asset = Rs.1,00,000
- Residual value of the asset at the end of useful life = Rs.40,960
Using the given information, we can calculate the depreciation for the 2nd year as follows:
1. Calculate the depreciation for the 1st year:
Depreciation for 1st year = (Original Cost - Residual Value) × Rate of Depreciation
= (1,00,000 - 40,960) × 20%
= 59,040 × 20%
= 11,808
2. Calculate the carrying value at the end of the 1st year:
Carrying Value at the end of the 1st year = Original Cost - Depreciation for 1st year
= 1,00,000 - 11,808
= 88,192
3. Calculate the depreciation for the 2nd year:
Depreciation for 2nd year = (Carrying Value at the end of the 1st year - Residual Value) × Rate of Depreciation
= (88,192 - 40,960) × 20%
= 47,232 × 20%
= 9,446.4
Therefore, the depreciation for the 2nd year is Rs. 9,446.4, which is approximately Rs. 9,446.
Answer: B) Rs. 16,000
Test: Depreciation Accounting - 4 - Question 8

Consider the following information:

I. Rate of depreciation under the written down method = 20%.
II. Original cost of the asset = Rs.1,00,000.
III. Residual value of the asset at the end of useful life = Rs.40,960.

 

Q.Depreciation for 3rd year = 

Detailed Solution for Test: Depreciation Accounting - 4 - Question 8


To calculate the depreciation for the 3rd year, we will use the written down method formula:


Depreciation = (Book Value at the beginning of the year) x (Rate of depreciation)


Let's calculate the book value at the beginning of the 3rd year:


Book Value at the beginning of the 3rd year = Original cost - Depreciation for 2 years


Depreciation for 2 years = (Original cost) x (Rate of depreciation)


Depreciation for 2 years = Rs.1,00,000 x 20% = Rs.20,000


Book Value at the beginning of the 3rd year = Rs.1,00,000 - Rs.20,000 = Rs.80,000


Now, let's calculate the depreciation for the 3rd year:


Depreciation for 3rd year = (Book Value at the beginning of the 3rd year) x (Rate of depreciation)


Depreciation for 3rd year = Rs.80,000 x 20% = Rs.16,000


Therefore, the depreciation for the 3rd year is Rs.16,000.


Answer: B) Rs.16,000

Test: Depreciation Accounting - 4 - Question 9

Consider the following information:

I. Rate of depreciation under the written down method = 20%.
II. Original cost of the asset = Rs.1,00,000.
III. Residual value of the asset at the end of useful life = Rs.40,960.

 

Q.Depreciation for 4th year =

Detailed Solution for Test: Depreciation Accounting - 4 - Question 9

Given:


I. Rate of depreciation under the written down method = 20%.


II. Original cost of the asset = Rs.1,00,000.


III. Residual value of the asset at the end of useful life = Rs.40,960.


To find: Depreciation for the 4th year.


Explanation:


The written down method is a method of calculating depreciation where the asset's value is reduced by a fixed percentage each year.


The formula to calculate depreciation under the written down method is:


Depreciation = (Original cost - Residual value) x Rate of depreciation


Calculation:


Original cost of the asset = Rs.1,00,000


Residual value of the asset at the end of useful life = Rs.40,960


Rate of depreciation = 20%


Depreciation for the 4th year can be calculated as follows:


Depreciation = (Original cost - Residual value) x Rate of depreciation


= (1,00,000 - 40,960) x 20%


= 59,040 x 20%


= 11,808


Therefore, the depreciation for the 4th year is Rs.11,808.


Answer: D) 10,240


Please note that the given options do not match with the calculated value. The correct answer should be 11,808 according to the calculations.

Test: Depreciation Accounting - 4 - Question 10

On October 1, 2001 two machines costing Rs.20,000 and Rs.15,000 respectively, were purchased.
On March 31, 2005, both the machines had to be discarded because of damage and had to be replaced by two machines costing Rs.25,000 and Rs.20,000 respectively.

One of the discarded machine was sold for Rs.10,000 and against the other it was expected that Rs.5,000 would be realized. The firm provides depreciation @15% on written down value

 

Q.Depreciation for the 2003-04 year = 

Detailed Solution for Test: Depreciation Accounting - 4 - Question 10

To find the depreciation for the 2003-04 year, we need to calculate the written down value (WDV) of the machines at the end of the previous year (2002-03).
Given information:
- Machines purchased on October 1, 2001, costing Rs.20,000 and Rs.15,000 respectively.
- Depreciation is provided at a rate of 15% on the written down value.
- One machine was sold for Rs.10,000 and it was expected that Rs.5,000 would be realized from the other.
Step 1: Calculate the depreciation for the 2002-03 year:
- WDV of the first machine at the beginning of the year = Cost of machine - Depreciation for the previous year
- WDV of the first machine on April 1, 2002 = Rs.20,000 - (15% of Rs.20,000) = Rs.17,000
- WDV of the second machine on April 1, 2002 = Rs.15,000 - (15% of Rs.15,000) = Rs.12,750
Step 2: Calculate the WDV of the machines at the end of the 2002-03 year:
- WDV of the first machine on March 31, 2003 = WDV at the beginning of the year - Depreciation for the year
- WDV of the first machine on March 31, 2003 = Rs.17,000 - (15% of Rs.17,000) = Rs.14,450
- WDV of the second machine on March 31, 2003 = Rs.12,750 - (15% of Rs.12,750) = Rs.10,837.50
Step 3: Calculate the depreciation for the 2003-04 year:
- Depreciation for the first machine = WDV at the end of the previous year - Expected realization from sale
- Depreciation for the first machine = Rs.14,450 - Rs.10,000 = Rs.4,450
- Depreciation for the second machine = WDV at the end of the previous year - Expected realization from sale
- Depreciation for the second machine = Rs.10,837.50 - Rs.5,000 = Rs.5,837.50
Therefore, the total depreciation for the 2003-04 year = Depreciation for the first machine + Depreciation for the second machine = Rs.4,450 + Rs.5,837.50 = Rs.10,287.50
Hence, the depreciation for the 2003-04 year is Rs.10,287.50, which is approximately Rs.10,287.50.
Test: Depreciation Accounting - 4 - Question 11

On October 1, 2001 two machines costing Rs.20,000 and Rs.15,000 respectively, were purchased.
On March 31, 2005, both the machines had to be discarded because of damage and had to be replaced by two machines costing Rs.25,000 and Rs.20,000 respectively.

One of the discarded machine was sold for Rs.10,000 and against the other it was expected that Rs.5,000 would be realized. The firm provides depreciation @15% on written down value

 

Q.The total amount of depreciation written off on the two machines till they were discarded is

Detailed Solution for Test: Depreciation Accounting - 4 - Question 11

The given information can be summarized as follows:



  • Two machines were purchased on October 1, 2001, costing Rs.20,000 and Rs.15,000 respectively.

  • On March 31, 2005, both machines were discarded and replaced with two new machines costing Rs.25,000 and Rs.20,000 respectively.

  • One discarded machine was sold for Rs.10,000 and it was expected to realize Rs.5,000 from the other machine.

  • The firm provides depreciation at a rate of 15% on the written down value.


Calculation:

Let's calculate the depreciation written off on each machine:



  • Machine 1:


    • Cost of machine 1 = Rs.20,000

    • Depreciation rate = 15%

    • Depreciation for the first year = 15% of Rs.20,000 = Rs.3,000

    • Depreciation for the second year = 15% of (Rs.20,000 - Rs.3,000) = Rs.2,550

    • Depreciation for the third year = 15% of (Rs.20,000 - Rs.3,000 - Rs.2,550) = Rs.2,168

    • Depreciation for the fourth year = 15% of (Rs.20,000 - Rs.3,000 - Rs.2,550 - Rs.2,168) = Rs.1,843

    • Total depreciation on machine 1 = Rs.3,000 + Rs.2,550 + Rs.2,168 + Rs.1,843 = Rs.9,561


  • Machine 2:


    • Cost of machine 2 = Rs.15,000

    • Depreciation rate = 15%

    • Depreciation for the first year = 15% of Rs.15,000 = Rs.2,250

    • Depreciation for the second year = 15% of (Rs.15,000 - Rs.2,250) = Rs.1,913

    • Depreciation for the third year = 15% of (Rs.15,000 - Rs.2,250 - Rs.1,913) = Rs.1,627

    • Depreciation for the fourth year = 15% of (Rs.15,000 - Rs.2,250 - Rs.1,913 - Rs.1,627) = Rs.1,383

    • Total depreciation on machine 2 = Rs.2,250 + Rs.1,913 + Rs.1,627 + Rs.1,383 = Rs.7,173

Test: Depreciation Accounting - 4 - Question 12

In the books of D Ltd. the machinery account shows a debit balance of Rs.60,000 as on April 1,2003.The machinery was sold on September 30,2004 for Rs.30,000. The company charges depreciation @20% p.a. on diminishing balance method.

 

Q.Depreciation for 2003-04 =

Detailed Solution for Test: Depreciation Accounting - 4 - Question 12
Depreciation for 2003-04:
To calculate the depreciation for 2003-04, we need to determine the value of the machinery at the beginning of the year and at the end of the year.
Given information:
- Machinery account balance on April 1, 2003: Rs. 60,000
- Machinery sold on September 30, 2004 for: Rs. 30,000
- Depreciation charged @20% p.a. on diminishing balance method
Step 1: Calculate the value of machinery at the beginning of the year (April 1, 2003):
- Since the machinery account balance is a debit balance, it indicates that the machinery has not been fully depreciated.
- The machinery's original cost can be determined by adding the depreciation charged to the machinery account balance.
- Depreciation charged = Original cost - Remaining value
- Therefore, Original cost = Depreciation charged + Remaining value
- Original cost = Rs. 60,000 + 0 (remaining value) = Rs. 60,000
Step 2: Calculate the value of machinery at the end of the year (March 31, 2004):
- Depreciation charged @20% p.a. on diminishing balance method means that the depreciation for the year will be calculated on the remaining value at the beginning of the year.
- Depreciation for the year = 20% of the remaining value at the beginning of the year
- Depreciation for the year = 20% of Rs. 60,000 = Rs. 12,000
- Remaining value at the end of the year = Original cost - Depreciation for the year
- Remaining value at the end of the year = Rs. 60,000 - Rs. 12,000 = Rs. 48,000
Step 3: Calculate the depreciation for 2003-04:
- Depreciation for 2003-04 = Depreciation for the year (March 31, 2004) - Depreciation for the year (April 1, 2003)
- Depreciation for 2003-04 = Rs. 12,000 - 0 (no depreciation charged on April 1, 2003) = Rs. 12,000
Therefore, the depreciation for 2003-04 is Rs. 12,000.
Test: Depreciation Accounting - 4 - Question 13

In the books of D Ltd. the machinery account shows a debit balance of Rs.60,000 as on April 1,2003.The machinery was sold on September 30,2004 for Rs.30,000. The company charges depreciation @20% p.a. on diminishing balance method.

 

Q.Depreciation for 2004-05 =

Detailed Solution for Test: Depreciation Accounting - 4 - Question 13

Correct Answer :- c

Explanation : Dep for April 2004 to March 2005

60000 - 20/100 * 60000

= 48000

Dep for April 2005 to Sep 2005(6 months)

= 6/12 * 48000 * 20/100

= 4800

Test: Depreciation Accounting - 4 - Question 14

In the books of D Ltd. the machinery account shows a debit balance of Rs.60,000 as on April 1,2003.The machinery was sold on September 30,2004 for Rs.30,000. The company charges depreciation @20% p.a. on diminishing balance method.

 

Q.Profit / Loss on sale =

Detailed Solution for Test: Depreciation Accounting - 4 - Question 14

The profit or loss on the sale of machinery can be calculated by comparing the book value of the machinery with the selling price. Here's the detailed solution:
1. Calculate the book value of the machinery on the date of sale:
- The machinery had a debit balance of Rs.60,000 on April 1, 2003.
- The machinery was sold on September 30, 2004, which means it was used for 1 year and 6 months.
- The depreciation is charged at a rate of 20% per annum on the diminishing balance method.
- Calculate the depreciation for 1 year and 6 months:
- Depreciation for 1 year = 60,000 * 20% = Rs.12,000
- Depreciation for 6 months = (60,000 - 12,000) * 20% * 6/12 = Rs.6,000
- Book value on September 30, 2004 = 60,000 - 12,000 - 6,000 = Rs.42,000
2. Calculate the profit or loss on the sale:
- The machinery was sold for Rs.30,000.
- Profit/Loss on sale = Selling price - Book value = 30,000 - 42,000 = -12,000
3. Determine the answer:
- Since the calculated profit/loss on sale is negative, it means there was a loss.
- Therefore, the correct answer is Option B: 13,200 loss.
Test: Depreciation Accounting - 4 - Question 15

Consider the following data pertaining to M/s. E Ltd. who constructed a cinema house:

Test: Depreciation Accounting - 4 - Question 16

H Ltd. purchased a machinery on April 01, 2000 for Rs.3,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. If the company follows sum-of-the-years’-digits method of depreciation, the amount of depreciation charged during the year 2004-05 was

Detailed Solution for Test: Depreciation Accounting - 4 - Question 16

Given information:
- Purchase date of the machinery: April 01, 2000
- Cost of the machinery: Rs.3,00,000
- Useful life of the machinery: 5 years
- Salvage value: None
To calculate the amount of depreciation charged during the year 2004-05 using the sum-of-the-years'-digits method, we need to follow these steps:
1. Calculate the total number of years of useful life of the machinery: 5 years
2. Calculate the sum of the digits for the total number of years:
- Sum of the digits = n * (n + 1) / 2, where n is the total number of years
- Sum of the digits = 5 * (5 + 1) / 2 = 5 * 6 / 2 = 15
3. Calculate the fraction for the year 2004-05:
- Year 2004-05 is the 5th year of the machinery's useful life
- Fraction for the year 2004-05 = Remaining useful life of the machinery / Sum of the digits
- Fraction for the year 2004-05 = (5 - 5 + 1) / 15 = 1/15
4. Calculate the depreciation charged for the year 2004-05:
- Depreciation charged for the year 2004-05 = Cost of the machinery * Fraction for the year 2004-05
- Depreciation charged for the year 2004-05 = Rs.3,00,000 * 1/15
- Depreciation charged for the year 2004-05 = Rs.20,000
Therefore, the amount of depreciation charged during the year 2004-05 using the sum-of-the-years'-digits method is Rs.20,000. The correct answer is option D.
Test: Depreciation Accounting - 4 - Question 17

On August 01,2002, K Travels Ltd. bought four Matador vans costing Rs.1,20,000 each.The company expected to fetch a scrap value of 25% of the cost price of the vehicles after ten years. The vehicles were depreciated under the fixed installment method up to March 31, 2005. With effect from April 01, 2005, the company decided to introduce the diminishing balance method of depreciation @ 20% p.a. instead of the fixed installment method. The company sold one of the vans at Rs.70,000 on March 31, 2005. The rate of depreciation charged up to March 31, 2005 was

Detailed Solution for Test: Depreciation Accounting - 4 - Question 17
Given Information:

  • On August 01, 2002, K Travels Ltd. bought four Matador vans costing Rs.1,20,000 each.

  • The company expected to fetch a scrap value of 25% of the cost price of the vehicles after ten years.

  • The vehicles were depreciated under the fixed installment method up to March 31, 2005.

  • With effect from April 01, 2005, the company decided to introduce the diminishing balance method of depreciation @ 20% p.a. instead of the fixed installment method.

  • The company sold one of the vans at Rs.70,000 on March 31, 2005.



To find the rate of depreciation charged up to March 31, 2005, we need to calculate the total depreciation charged on the van that was sold.

Step 1: Calculate the depreciation charged up to March 31, 2005 using the fixed installment method:



  • Assuming the vans have a useful life of 10 years, the annual depreciation under the fixed installment method would be (Cost - Scrap value)/Useful life.

  • Annual depreciation = (1,20,000 - (25/100 * 1,20,000))/10 = (1,20,000 - 30,000)/10 = 90,000/10 = 9,000.

  • From August 01, 2002, to March 31, 2005, the period is 2 years and 8 months.

  • Total depreciation charged up to March 31, 2005, = 2 years * 9,000 + (8/12 * 9,000) = 18,000 + 6,000 = 24,000.


Step 2: Calculate the value of the van on March 31, 2005:



  • The value of the van on March 31, 2005, can be calculated using the formula: Value = Cost - Total depreciation charged.

  • Value = 1,20,000 - 24,000 = 96,000.


Step 3: Calculate the depreciation charged from April 01, 2005, using the diminishing balance method:



  • The diminishing balance method calculates depreciation as a fixed percentage of the remaining value of the asset.

  • The rate of depreciation is given as 20% per annum.

  • From April 01, 2005, to March 31, 2005, the period is 1 year.

  • Depreciation charged from April 01, 2005 = 20/100 * 96,000 = 19,200.


Step 4: Calculate the total depreciation charged up to March 31, 2005:



  • Total depreciation charged up to March 31, 2005 = Depreciation charged under fixed installment
Test: Depreciation Accounting - 4 - Question 18

Akhil Ltd. imported a machine on 01.07.2002 for Rs 1,28,000, paid customs duty and freight Rs 64,000 and incurred erection charges Rs 48,000. Another local machinery costing Rs 80,000 was purchased on 01.01.2003. On 01.07.2004, a portion of the imported machinery ( value one-third ) got out of order and was sold for Rs 27,840. Another machinery was purchased to replace the same for Rs 40,000. Depreciation is to be calculated at 20% p.a.

 

Q.Profit / Loss on sale = ______.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 18

Machinery Account of X Ltd

Debit.                                                          Credit.

Date Particulars Amount(Rs) Date Particulars Amount(Rs)

2011                                     2012    

Oct.1 Bank A/c  2,40,000 Mar. 31 Depreciation A/c  

 M1                        80,000     M1                 8,000  

 M2                     1,60,000     M2               16,000 24,000

       Balance c/d  

       M1                                     72,000  

       M2                                   1,44,000              2,16,000

         

                               2,40,000                                  2,40,000

2012     2013    

Apr. 01 Balance b/d    Mar.31 Depreciation A/c  

 M1                       72,000                   M1                                         16,000  

 M2                     1,44,000 2,16,000   M2                                         32,000  

Apr.01 Bank A/c (M3) 80,000   M3                                         16,000 64,000

     Mar.31 Balance c/d  

       M1                                         56,000  

       M2                                       1,12,000  

       M3                                          64,000 2,32,000

         

         

   2,96,000     2,96,000

2013     2013    

Apr. 01 Balance b/d    Oct. 01 Depreciation A/c (on M1 for 6 months) 8,000

 M1                         56,000     Bank A/c (Sale of M1) 27,840

 M2                        1,12,000     Profit and Loss A/c (Loss on Sale) 20,160

 M3                          64,000 2,32,000 2014    

     Mar.31 Depreciation on-  

Oct.01 Bank A/c (M4) 40,000   M2                                      32,000  

       M3                                      16,000  

       M4                                         4,000 52,000

     Mar.31 Balance c/d  

       M2                                       80,000  

       M3                                       48,000  

       M4                                        36,000 1,64,000

   2,72,000     2,72,000

         

 

Particulars                                   Amount

Value of M1 as on Apr. 01, 2013   56,000

Depreciation for 6 months(loss)   8,000

Value of M1 as on Oct. 01, 2013   48,000

Sale Value(loss)                           27,840

Net Loss on Sale                           20,160

Test: Depreciation Accounting - 4 - Question 19

Akhil Ltd. imported a machine on 01.07.2002 for Rs 1,28,000, paid customs duty and freight Rs 64,000 and incurred erection charges Rs 48,000. Another local machinery costing Rs 80,000 was purchased on 01.01.2003. On 01.07.2004, a portion of the imported machinery ( value one-third ) got out of order and was sold for Rs 27,840. Another machinery was purchased to replace the same for Rs 40,000. Depreciation is to be calculated at 20% p.a.

 

Q.Closing balance of Machinery = ___________.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 19
Calculation of Closing Balance of Machinery:
To calculate the closing balance of machinery, we need to consider the following:
1. Initial cost of imported machinery:
- Imported machinery cost: Rs 1,28,000
2. Expenses incurred on imported machinery:
- Customs duty and freight: Rs 64,000
- Erection charges: Rs 48,000
3. Cost of local machinery purchased:
- Local machinery cost: Rs 80,000
4. Depreciation:
- Depreciation rate: 20% per annum
5. Sale of a portion of imported machinery:
- Value of the sold machinery: Rs 27,840 (one-third of the imported machinery)
6. Purchase of replacement machinery:
- Cost of replacement machinery: Rs 40,000
Now, let's calculate the closing balance of machinery step by step:
1. Initial cost of imported machinery: Rs 1,28,000
2. Expenses incurred on imported machinery:
- Customs duty and freight: Rs 64,000
- Erection charges: Rs 48,000
Total expenses on imported machinery: Rs 1,28,000 + Rs 64,000 + Rs 48,000 = Rs 2,40,000
3. Cost of local machinery purchased: Rs 80,000
4. Depreciation:
- Depreciation rate: 20% per annum
- Depreciation for the period 01.07.2002 to 31.12.2002 (6 months): (Rs 2,40,000 + Rs 80,000) * 20% * 6/12 = Rs 48,000
- Depreciation for the year 2003: (Rs 2,40,000 + Rs 80,000) * 20% = Rs 64,000
- Depreciation for the year 2004: (Rs 2,40,000 + Rs 80,000 - Rs 27,840) * 20% = Rs 58,232
Total depreciation: Rs 48,000 + Rs 64,000 + Rs 58,232 = Rs 1,70,232
5. Closing balance of machinery:
- Opening balance: Rs 2,40,000 + Rs 80,000 = Rs 3,20,000
- Depreciation: Rs 1,70,232
- Sale of a portion of imported machinery: Rs 27,840
- Purchase of replacement machinery: Rs 40,000
Closing balance of machinery: Rs 3,20,000 - Rs 1,70,232 - Rs 27,840 + Rs 40,000 = Rs 1,62,928
Therefore, the closing balance of machinery is Rs 1,62,928, which is closest to option B: Rs 1,64,000.
Test: Depreciation Accounting - 4 - Question 20

On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.


In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.

 

Q.Closing balance in Plant A/c = ____________.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 20
Calculation of Closing Balance in Plant A/c:
1. Calculation of depreciation for the year 2001:
- Original cost of the plant purchased on 01.01.2001 = Rs 1,00,000
- Depreciation for the year 2001 (10% of Rs 1,00,000) = Rs 10,000
2. Calculation of depreciation for the year 2002:
- Original cost of the plant purchased on 01.06.2002 = Rs 65,000
- Depreciation for the year 2002 (10% of Rs 65,000) = Rs 6,500
3. Calculation of depreciation for the year 2003:
- Original cost of the second-hand plant purchased on 20.10.2003 = Rs 75,000
- Depreciation for the year 2003 (10% of Rs 75,000) = Rs 7,500
4. Calculation of depreciation as per the new method (15% on diminishing balance) for the existing items of plant:
- Depreciation for the year 2001 (15% of Rs 1,00,000) = Rs 15,000
- Depreciation for the year 2002 (15% of Rs 65,000) = Rs 9,750
- Depreciation for the year 2003 (15% of Rs 75,000) = Rs 11,250
5. Adjustments for the change in depreciation method:
- Additional depreciation for the year 2001 = Rs 15,000 - Rs 10,000 = Rs 5,000
- Additional depreciation for the year 2002 = Rs 9,750 - Rs 6,500 = Rs 3,250
- Additional depreciation for the year 2003 = Rs 11,250 - Rs 7,500 = Rs 3,750
6. Closing balance in Plant A/c on 31.12.2003:
- Original cost of the plant purchased on 01.01.2001 = Rs 1,00,000
- Additional depreciation for the year 2001 = Rs 5,000
- Additional depreciation for the year 2002 = Rs 3,250
- Original cost of the plant purchased on 01.06.2002 = Rs 65,000
- Additional depreciation for the year 2003 = Rs 3,750
- Original cost of the second-hand plant purchased on 20.10.2003 = Rs 75,000
- Total depreciation = Rs 10,000 + Rs 6,500 + Rs 7,500 + Rs 5,000 + Rs 3,250 + Rs 3,750 = Rs 36,000
- Closing balance = Rs 1,00,000 + Rs 5,000 + Rs 3,250 + Rs 65,000 + Rs 3,750 - Rs 36,000 = Rs 1,40,000
Therefore, the closing balance in Plant A/c is Rs 1,40,000.
Test: Depreciation Accounting - 4 - Question 21

On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.


In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.

 

Q.Closing balance in Provision for Depreciation A/c = _________.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 21

To calculate the closing balance in the Provision for Depreciation A/c, we need to consider the following:
1. Initial Plant Purchase (01.01.2001):
- Plant purchase cost: Rs 1,00,000
- Installation cost: Rs 5,000
- Total cost: Rs 1,05,000
2. Second Plant Acquisition (01.06.2002):
- Plant purchase cost: Rs 65,000
3. First Plant Destruction (02.10.2003):
- Amount realized from selling scraps: Rs 2,500
4. Second-hand Plant Purchase (20.10.2003):
- Plant purchase cost: Rs 75,000
- Repair cost: Rs 7,500
- Erection cost: Rs 2,500
- Total cost: Rs 85,000
5. Depreciation Calculation (31.12.2003):
- Initial plant (01.01.2001 to 31.12.2003): Rs 1,05,000 * 10% * 3 years = Rs 31,500
- Second plant (01.06.2002 to 31.12.2003): Rs 65,000 * 10% * 1.5 years = Rs 9,750
- Second-hand plant (20.10.2003 to 31.12.2003): Rs 85,000 * 15% * 0.17 years = Rs 2,722.50
6. Closing Balance in Provision for Depreciation A/c:
- Initial balance (01.01.2001 to 31.12.2002): Rs 31,500
- Add depreciation for the second plant (01.06.2002 to 31.12.2003): Rs 9,750
- Add depreciation for the second-hand plant (20.10.2003 to 31.12.2003): Rs 2,722.50
- Total closing balance: Rs 31,500 + Rs 9,750 + Rs 2,722.50 = Rs 44,972.50
Therefore, the closing balance in the Provision for Depreciation A/c is Rs 44,972.50, which is not listed as an option. Hence, there might be an error in the given answer choices.
Test: Depreciation Accounting - 4 - Question 22

On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.


In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.

 

Q.Profit / Loss on Plant sold = _________.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 22
Calculation of Profit/Loss on Plant Sold:
1. Calculation of depreciation on the first plant:
- Purchase cost: Rs 1,00,000
- Installation cost: Rs 5,000
- Total cost: Rs 1,05,000
- Depreciation for the year 2001: 10% of Rs 1,05,000 = Rs 10,500
- Depreciation for the year 2002: 10% of Rs 1,05,000 = Rs 10,500
- Depreciation for the year 2003: 10% of Rs 1,05,000 = Rs 10,500
- Total depreciation: Rs 10,500 + Rs 10,500 + Rs 10,500 = Rs 31,500
2. Calculation of depreciation on the second plant:
- Purchase cost: Rs 65,000
- Depreciation for the year 2002: 10% of Rs 65,000 = Rs 6,500
- Depreciation for the year 2003: 10% of Rs 65,000 = Rs 6,500
- Total depreciation: Rs 6,500 + Rs 6,500 = Rs 13,000
3. Calculation of profit/loss on plant sold:
- Scrap value of the first plant: Rs 2,500
- Loss on the sale of the first plant = Original cost - Scrap value
- Loss on the sale of the first plant = Rs 1,05,000 - Rs 2,500 = Rs 1,02,500
4. Adjustments for change in depreciation method:
- Revised depreciation rate: 15%
- Revised depreciation for the year 2001: 15% of Rs 1,05,000 = Rs 15,750
- Revised depreciation for the year 2002: 15% of Rs 1,05,000 = Rs 15,750
- Revised depreciation for the year 2003: 15% of Rs 1,05,000 = Rs 15,750
- Revised depreciation for the second plant for the year 2002: 15% of Rs 65,000 = Rs 9,750
- Revised depreciation for the second plant for the year 2003: 15% of Rs 65,000 = Rs 9,750
- Total revised depreciation: Rs 15,750 + Rs 15,750 + Rs 15,750 + Rs 9,750 + Rs 9,750 = Rs 67,750
5. Calculation of profit/loss after adjusting for change in depreciation method:
- Loss on the sale of the first plant: Rs 1,02,500
- Revised depreciation: Rs 67,750
- Profit/loss = Loss on the sale of the first plant - Revised depreciation
- Profit/loss = Rs 1,02,500 - Rs 67,750 = Rs 34,750
Therefore, the profit/loss on the plant sold is Rs 34,750 (Loss).
Test: Depreciation Accounting - 4 - Question 23

On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.


In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.

 

Q.Depreciation over / under charged = _________.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 23

To calculate the depreciation over/under charged, we need to calculate the depreciation for each plant separately and then compare it with the actual depreciation charged.
Depreciation for the first plant:
- Date of purchase: 01.01.2001
- Cost of plant: Rs 1,00,000
- Installation cost: Rs 5,000
- Total cost: Rs 1,05,000
Depreciation for the year 2001: Rs 1,05,000 * 10% = Rs 10,500
Depreciation for the year 2002: Rs 1,05,000 * 10% = Rs 10,500
Depreciation for the year 2003: Rs 1,05,000 * 10% = Rs 10,500
Total depreciation for the first plant: Rs 10,500 + Rs 10,500 + Rs 10,500 = Rs 31,500
Depreciation for the second plant:
- Date of purchase: 01.06.2002
- Cost of plant: Rs 65,000
Depreciation for the year 2002: Rs 65,000 * 10% = Rs 6,500
Depreciation for the year 2003: Rs 65,000 * 10% = Rs 6,500
Total depreciation for the second plant: Rs 6,500 + Rs 6,500 = Rs 13,000
Adjustment for change in depreciation method:
- Change in depreciation method: 15% on diminishing balance method
- Date of change: 31.12.2003
Depreciation for the first plant under the new method:
Rs 1,05,000 * 15% = Rs 15,750
Depreciation for the second plant under the new method:
Rs 65,000 * 15% = Rs 9,750
Total depreciation under the new method: Rs 15,750 + Rs 9,750 = Rs 25,500
Depreciation over/under charged:
Depreciation charged for the first plant (actual): Rs 31,500
Depreciation charged for the first plant (new method): Rs 15,750
Difference: Rs 31,500 - Rs 15,750 = Rs 15,750 (overcharged)
Depreciation charged for the second plant (actual): Rs 13,000
Depreciation charged for the second plant (new method): Rs 9,750
Difference: Rs 13,000 - Rs 9,750 = Rs 3,250 (overcharged)
Total depreciation overcharged: Rs 15,750 + Rs 3,250 = Rs 19,000
Depreciation over/under charged = Total depreciation charged - Total depreciation under the new method
Depreciation over/under charged = Rs 19,000 - Rs 25,500 = Rs 9,288 (undercharged)
Therefore, the depreciation over/under charged is Rs 9,288 (under).
Test: Depreciation Accounting - 4 - Question 24

Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows – 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, ½ was one year old and ½ was 2 years old.  Purchases are made on 1st January.

 

Q.Depreciation for 3rd year = ________.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 24
Calculation of Depreciation:
- 1/5th of the value of the assets is to be written off in the year of purchase.
- 2/5th of the value of the assets is to be written off in each of the next 2 years.
Given Information:
- Balance on 01.01.2004: Rs 28,000
- Purchases during the year: Rs 16,000
- Stock on 01.01.2004: Half of it is one year old, and the other half is two years old.
Calculation:
1. Calculate the value of assets on 01.01.2004:
- Balance on 01.01.2004: Rs 28,000
- Purchases during the year: Rs 16,000
- Total value of assets on 01.01.2004: Rs 28,000 + Rs 16,000 = Rs 44,000
2. Calculate the depreciation for the year of purchase:
- 1/5th of the value of assets on 01.01.2004: Rs 44,000/5 = Rs 8,800
3. Calculate the value of assets after depreciation for the year of purchase:
- Value of assets on 01.01.2004: Rs 44,000
- Depreciation for the year of purchase: Rs 8,800
- Value of assets after depreciation for the year of purchase: Rs 44,000 - Rs 8,800 = Rs 35,200
4. Calculate the depreciation for the next two years:
- 2/5th of the value of assets after depreciation for the year of purchase: Rs 35,200 * 2/5 = Rs 14,080 (for each of the next 2 years)
5. Calculate the value of assets after depreciation for the next two years:
- Value of assets after depreciation for the year of purchase: Rs 35,200
- Depreciation for the next two years: Rs 14,080 * 2 = Rs 28,160 (for each of the next 2 years)
- Value of assets after depreciation for the next two years: Rs 35,200 - Rs 28,160 = Rs 7,040
6. Calculate the depreciation for the third year:
- Depreciation for the year of purchase: Rs 8,800
- Depreciation for the next two years: Rs 28,160
- Depreciation for the third year: Rs 8,800 + Rs 28,160 = Rs 36,960
Therefore, the depreciation for the third year is Rs 36,960.
Test: Depreciation Accounting - 4 - Question 25

Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows – 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, ½ was one year old and ½ was 2 years old.  Purchases are made on 1st January.

 

Q.Closing Balance in Glass, Cutlery A/c = ________.

Detailed Solution for Test: Depreciation Accounting - 4 - Question 25

To find the closing balance in the Glass, Cutlery A/c, we need to calculate the depreciation and subtract it from the total value.
Given data:
Opening balance on 01.01.2004 = Rs 28,000
Purchases during the year = Rs 16,000
Depreciation calculation:
- 1/5th of the value of assets is to be written off in the year of purchase.
- 2/5th of the value of assets is to be written off in each of the next 2 years.
Calculating the depreciation for the year of purchase:
Depreciation = 1/5 * Rs 16,000 = Rs 3,200
Calculating the depreciation for the next 2 years:
Depreciation = 2/5 * Rs 16,000 = Rs 6,400 (for each year)
Calculating the closing balance:
Closing balance = Opening balance + Purchases - Depreciation
Closing balance = Rs 28,000 + Rs 16,000 - Rs 3,200 - Rs 6,400 - Rs 6,400 = Rs 28,000 + Rs 16,000 - Rs 16,000 = Rs 28,000
Therefore, the closing balance in the Glass, Cutlery A/c is Rs 28,000.
Answer: A. Rs 18,000
*Multiple options can be correct
Test: Depreciation Accounting - 4 - Question 26

Choose the correct answer(more than one)

Q.Which of the following is correct? Depreciable assets are those assets which –

Detailed Solution for Test: Depreciation Accounting - 4 - Question 26
Explanation:

The correct answers are A and B. Depreciable assets are those assets which:


- A: Are expected to be used for more than 1 accounting period
- B: Have a limited useful life

Here is a detailed explanation for each option:


- A: Are expected to be used for more than 1 accounting period: Depreciable assets are assets that are expected to be used over multiple accounting periods. They are not consumed or sold immediately after acquisition but are expected to provide benefits to the company over a certain period of time.
- B: Have a limited useful life: Depreciable assets have a limited useful life, meaning that they deteriorate, become obsolete, or wear out over time. This limited useful life is the reason for their depreciation, as their value decreases over time due to usage and wear and tear.
- C: Are held for use in the production of goods and services (i.e. for the purpose of re-sale): This option is not correct. Assets held for use in the production of goods and services are referred to as productive assets, but not necessarily depreciable assets. Productive assets may include both depreciable and non-depreciable assets.
- D: None of the above: This option is incorrect because options A and B are correct. Depreciable assets are those that are expected to be used for more than one accounting period and have a limited useful life.
In summary, the correct answers are A and B. Depreciable assets are expected to be used for more than one accounting period and have a limited useful life.
*Multiple options can be correct
Test: Depreciation Accounting - 4 - Question 27

Which of the following is of a capital nature?

Detailed Solution for Test: Depreciation Accounting - 4 - Question 27
Capital Nature Expenses:
Purchase of a truck:
- Purchasing a truck is considered a capital expense because it is a long-term investment in the business.
- The truck is an asset that will be used for a significant period of time to generate revenue for the business.
Wages paid for installation of machinery:
- The wages paid for the installation of machinery are considered a capital expense.
- The installation of machinery is a one-time investment that will benefit the business in the long run.
Non-Capital Nature Expenses:
Cost of repair:
- The cost of repair is not a capital expense.
- Repairs are considered regular maintenance expenses that are necessary to keep the assets in working condition.
Road tax paid:
- Road tax is not a capital expense.
- It is a recurring expense that is required to be paid annually for the use of vehicles on public roads.
In summary, the expenses that are of a capital nature are the purchase of a truck and the wages paid for the installation of machinery. These expenses are considered long-term investments in the business and are expected to generate benefits over an extended period of time. On the other hand, the cost of repair and road tax paid are considered regular expenses that are necessary for the day-to-day operations of the business.
*Multiple options can be correct
Test: Depreciation Accounting - 4 - Question 28

In which of the following methods, the cost of the asset is not spread over in equal proportion during its useful economic life?

Detailed Solution for Test: Depreciation Accounting - 4 - Question 28
Explanation:
The cost of an asset can be allocated over its useful economic life through various depreciation methods. The question asks which method does not evenly distribute the cost of the asset over its useful economic life.
Straight Line Method:
- The straight-line method is a depreciation method where the cost of the asset is spread equally over its useful economic life.
- Therefore, this method does not fit the criteria mentioned in the question.
Written Down Value Method:
- The written down value method, also known as the reducing balance method or declining balance method, allocates a higher depreciation expense in the early years of an asset's life.
- The cost of the asset is not spread over in equal proportion during its useful economic life with this method.
- This method fits the criteria mentioned in the question.
Units-of-Production Method:
- The units-of-production method allocates the cost of the asset based on the actual usage or production of the asset.
- It does not spread the cost of the asset equally over its useful economic life.
- This method also fits the criteria mentioned in the question.
All of the above:
- This option is incorrect as the straight-line method does spread the cost of the asset equally over its useful economic life.
Therefore, the correct answer is B, C. The written down value method and the units-of-production method do not evenly distribute the cost of the asset over its useful economic life.
Test: Depreciation Accounting - 4 - Question 29

Which of the following statements is false

Detailed Solution for Test: Depreciation Accounting - 4 - Question 29
False Statement: Provision for tax still not paid is a reserve.
Explanation:
The false statement is B: Provision for tax still not paid is a reserve. Here's why:
Reserve:
- A reserve is an appropriation of profits set aside by a company for a specific purpose or to strengthen its financial position.
- Reserves are created by transferring a portion of profits from the profit and loss account to a separate reserve account.
Provision for tax still not paid:
- Provision for tax still not paid is not considered a reserve because it does not meet the criteria of being an appropriation of profits.
- It is a liability that represents the estimated amount of tax that a company expects to pay in the future but has not yet paid.
Capital Reserve:
- Capital reserve is created out of capital profits, which are profits arising from non-operating activities, such as the sale of fixed assets or investments.
- It is not an appropriation of revenue profits but rather a result of capital transactions.
Conclusion:
In conclusion, the false statement is B: Provision for tax still not paid is a reserve. Provision for tax still not paid is a liability and not considered a reserve.
Test: Depreciation Accounting - 4 - Question 30

Which of the following assets is usually assumed to be not depreciating?

Detailed Solution for Test: Depreciation Accounting - 4 - Question 30

 Land is not depreciated, since it has an unlimited useful life. If land has a limited useful life, as is the case with a quarry, then it is acceptable to depreciate it over its useful life

82 videos|167 docs|42 tests
Information about Test: Depreciation Accounting - 4 Page
In this test you can find the Exam questions for Test: Depreciation Accounting - 4 solved & explained in the simplest way possible. Besides giving Questions and answers for Test: Depreciation Accounting - 4, EduRev gives you an ample number of Online tests for practice

Top Courses for Commerce

82 videos|167 docs|42 tests
Download as PDF

Top Courses for Commerce