DepreciationÂ in accountancy is very important concept to meanÂ the decrease in value of assets (fair valueÂ depreciation), and Â the allocation of the cost of assets to periods in which the assets are used (depreciation with theÂ matching principle).Thus , decrease in value of assetÂ Â affects values of businesses and entities whereas allocation of cost over period of time Â latter affects net income.Several standard methods of computing depreciation expense may be used, including fixed percentage, straight line, and declining balance methods.
10 questions on Deprecaition chapter of accountancy of Â Class XI
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From the following which asset is a Non-Depreciable Asset:CorrectIncorrect
Depreciation is a non-cash expense :CorrectIncorrect
Depreciation provides funds for replacement of Fixed Assets :CorrectIncorrect
Formula to compute the amount of Depreciation :CorrectIncorrect
X Ltd. purchased a machinery on 1st July, 2011 for Rs. 3,50,000. Depreciation is provided @ 10 % p.a. on WDV method. Compute the amount of depreciation for the year ended on 31st December, 2012:CorrectIncorrect
A machine costing Rs. 10,000 (Provision for Depreciation Rs. 3,000) is sold for Rs. 5,000. Amount of Profit or Loss will be :CorrectIncorrect
Estimated sale value of an Asset at the end of its useful life is called :CorrectIncorrect