Depreciation in accountancy is very important concept to mean the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with the matching principle).Thus , decrease in value of asset affects values of businesses and entities whereas allocation of cost over period of time 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 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