Practice Test


1) Amit Ltd .purchased a machine on 01.01.2003 for Rs.1,20,000.Installation expenses were Rs10,000.Residual value after 5 years Rs.5,000.On 01.07.2003,expenses for repairs were incurred to the extent of Rs.2,000.depreciation is provided @10%p.a.under W.D.V method. Depreciation for the 4th year =


2) Original cost =Rs.1,26,000: Salvage value = nil: Useful life = 6 years.Depreciation for the 1st year under sum of years digits method will be


3) Obsolescence of a depreciable asset may be caused by I Technological changes. II.Improvement in production method.III. Changes in market demand for the product or service output,.IV. Legal or other restrictions.


4) Amit Ltd .purchased a machine on 01.01.2003 for Rs.1,20,000.Installation expenses were Rs10,000.Residual value after 5 years Rs.5,000.On 01.07.2003,expenses for repairs were incurred to the extent of Rs.2,000.depreciation is provided @10%p.a.under S.L.M method. Depreciation for the year =


5) Which of the Following term is /are False ? I The term 'depreciation ','depletion' and 'amortization' convey the same meaning.II.provision for depreciation account is debited when provision for depreciation account is created . III. The main purpose of charging the profit and loss account for the purpose of income determination


6) The number of production or similar units expected to be obtained from the use of an asset by an enterprise is called as


7) Which of the Following term is not True with regards to fixed assets ?


8) Original cost =Rs.1,26,000: Salvage value = 6,000 :Useful life = 6 years. Annual Depreciation under SLM


9) Original cost = Rs.1,26,000: Salvage value = 6,000.Depreciation for the 2nd year @10% p.a.under wdv method


10) Which of the following expenses is not included in the cost of a plant and equipment ?


11) For charging depreciation , on which of the following assets , the depletion method is adopted ?


12) If a concern proposes to discontinue its business from March 2005 and decides to dispose off all its assets within a period of 4 months , the Balance sheet as on March 31,2005 should indicate the assets at their


13) In the case of downward revaluation of an asset which is for the first time revalued , the account to be debited is


14) In which of the following methods , is the cost of the asset written off in equal proportions during its useful economic life ?


15) The portion of the acquisition cost of the assets , yet to be allocated is known as


16) Original cost =Rs.1,00,000: Expected Salvage value=2,000 :Useful life=5 years. Depreciation for 3rd year as per SLM is


17) Original cost =Rs.1,00,000: Expected Salvage value=2,000 :Useful life=5 years. Rate of Depreciation p.a. is


18) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.a under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost so Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005.Cost of machinery on 01.04.2002 =


19) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.a under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost so Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005. Depreciation provided in 2002-03=


20) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.a under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost so Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005. Depreciation provided in 2003-04 =


21) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.aa under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost so Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005. Depreciation under new method for 2002-2003 , 2003-04 =


22) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.a under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005.Further Depreciation to be provided


23) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.a under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005.Balance in machinery account on 31.03.2004


24) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.a under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005. Depreciation provided in 2004-05 =


25) On April 01,2004 the debit balance of the machinery account of A Ltd.was Rs.5,67,000. the machine was purchased on April 01 , 2002.The company charged depreciation at the rate of 10 % p.a under diminishing balance method .On October 01,2004 , the company acquired a new machine at a cost of Rs.60,000 and incurred Rs.6,000 for the installation of the new machine. The company decided to change the system of providing depreciation from the diminishing balance method to the SLM with retrospective effect from April 01, 2002.The rate of depreciation will remain the same. The company decided to make necessary adjustment in respect of depreciation due to the change in the method in the year 2004-2005.The balance outstanding to the debit of machinery account as on March 31,2005 after effecting the above changes was


26) The balance in the accumulated provision for depreciation account of a company as at the beginning of the year 2004-2005 was Rs.2,00,000 when the original cost of assets amounted to Rs.10,00,000.The company charges 10% depreciation on SLM basis for all the assets including those which have been either purchased or sold during the year . One such assets costing Rs.5,00,000 with accumulated depreciation as at the beginning of the year of Rs.80,000 was disposed off during the year. Depreciation for the year is


27) The balance in the accumulated provision for depreciation account of a company as at the beginning of the year 2004-2005 was Rs.2,00,000 when the original cost of assets amounted to Rs.10,00,000.The company charges 10% depreciation on SLM basis for all the assets including those which have been either purchased or sold during the year . One such assets costing Rs.5,00,000 with accumulated depreciation as at the beginning of the year of Rs.80,000 was disposed off during the year. The balance of the accumulated Depreciation account at the end of the year considering the current year's depreciation charge would be


28) B Ltd has been charging depreciation on the SLM basis .It charges a full year depreciation even if the machinery is utilized only for part of the year . An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis . Now the company decides to change the methods of Depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8%p.a.assuming that before the effect of this changes could be accounted , depreciation for the current year is already charged based on SLM and is reflected in the depreciated value of Rs.2,97,500. SLM depreciation p.a. is


29) B Ltd has been charging depreciation on the SLM basis .It charges a full year depreciation even if the machinery is utilized only for part of the year . An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis . Now the company decides to change the methods of Depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8%p.a.assuming that before the effect of this changes could be accounted , depreciation for the current year is already charged based on SLM and is reflected in the depreciated value of Rs.2,97,500. Number of years for which depreciation is charged on the basis is


30) B Ltd has been charging depreciation on the SLM basis .It charges a full year depreciation even if the machinery is utilized only for part of the year . An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis . Now the company decides to change the methods of Depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8%p.a.assuming that before the effect of this changes could be accounted , depreciation for the current year is already charged based on SLM and is reflected in the depreciated value of Rs.2,97,500. If 8% depreciation was charged by the reducing balance method , wdv at the end of 1st year is


31) B Ltd has been charging depreciation on the SLM basis .It charges a full year depreciation even if the machinery is utilized only for part of the year . An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis . Now the company decides to change the methods of Depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8%p.a.assuming that before the effect of this changes could be accounted , depreciation for the current year is already charged based on SLM and is reflected in the depreciated value of Rs.2,97,500. If 8% depreciation was charged by the reducing balance method , wdv at the end of 2nd year is


32) B Ltd has been charging depreciation on the SLM basis .It charges a full year depreciation even if the machinery is utilized only for part of the year . An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis . Now the company decides to change the methods of Depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8%p.a.assuming that before the effect of this changes could be accounted , depreciation for the current year is already charged based on SLM and is reflected in the depreciated value of Rs.2,97,500. If 8% depreciation was charged by the reducing balance method , wdv at the end of 3 rd year is


33) B Ltd has been charging depreciation on the SLM basis .It charges a full year depreciation even if the machinery is utilized only for part of the year . An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis . Now the company decides to change the methods of Depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8%p.a.assuming that before the effect of this changes could be accounted , depreciation for the current year is already charged based on SLM and is reflected in the depreciated value of Rs.2,97,500. The extra depreciation to be provided based on the changed method during the year is


34) In the year 2004-2005 , C Ltd . Purchased a new machine and made the following payments in the relation to it : Cost as per supplier's list Rs.5,20,000 ; Less : Agreed discount Rs.50,000 , Delivery charges Rs.10,000 , Erection charges Rs.20,000 , Annual maintenance charges Rs.30,000 , Additional components to increase capacity of the machine Rs.40,000 , Annual insurance premium Rs 5,000 . The cost of the machine is


35) In the year 2004-2005 , C Ltd . Purchased a new machine and made the following payments in the relation to it : Cost as per supplier's list Rs.5,20,000 ; Less : Agreed discount Rs.50,000 , Delivery charges Rs.10,000 , Erection charges Rs.20,000 , Annual maintenance charges Rs.30,000 , Additional components to increase capacity of the machine Rs.40,000 , Annual insurance premium Rs 5,000 .If depreciation is provided @ 10% p.a.SLM , depreciation for 3rd year is


36) In the year 2004-2005 , C Ltd . Purchased a new machine and made the following payments in the relation to it : Cost as per supplier's list Rs.5,20,000 ; Less : Agreed discount Rs.50,000 , Delivery charges Rs.10,000 , Erection charges Rs.20,000 , Annual maintenance charges Rs.30,000 , Additional components to increase capacity of the machine Rs.40,000 , Annual insurance premium Rs 5,000 .If depreciation is provided @ 10% p.a.WDV , depreciation for 3rd year is


37) A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be above 5 years and scrap value at Rs.10,000.The production plan for the next 5 years using the above machine is as follows :Year 1, 5,000 units , Year 2, 10,000 units , Year 3, 12,000 units , Year 4, 20,000 units , Year 5, 25,000 units ,;The depreciation expenditure for the 1st year under units-of-production method will be


38) A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be above 5 years and scrap value at Rs.10,000.The production plan for the next 5 years using the above machine is as follows :Year 1, 5,000 units , Year 2, 10,000 units , Year 3, 12,000 units , Year 4, 20,000 units , Year 5, 25,000 units ,;The depreciation expenditure for the 2nd year under units-of-production method will be


39) A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be above 5 years and scrap value at Rs.10,000.The production plan for the next 5 years using the above machine is as follows :Year 1, 5,000 units , Year 2, 10,000 units , Year 3, 12,000 units , Year 4, 20,000 units , Year 5, 25,000 units ,;The depreciation expenditure for the 3rd year under units-of-production method will be


40) A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be above 5 years and scrap value at Rs.10,000.The production plan for the next 5 years using the above machine is as follows :Year 1, 5,000 units , Year 2, 10,000 units , Year 3, 12,000 units , Year 4, 20,000 units , Year 5, 25,000 units ,;The depreciation expenditure for the 4th year under units-of-production method will be


41) A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be above 5 years and scrap value at Rs.10,000.The production plan for the next 5 years using the above machine is as follows :Year 1, 5,000 units , Year 2, 10,000 units , Year 3, 12,000 units , Year 4, 20,000 units , Year 5, 25,000 units ,;The depreciation expenditure for the 5th year under units-of-production method will be


42) Consider the following information :I. Rate of depreciation under the written down method = 20%. , II.Original cost of assets = Rs.1,00,000. III. Residual value of an asset at the end of useful life = Rs.40,960 , The estimated useful life of the asset , in years , is


43) Consider the following information :I. Rate of depreciation under the written down method = 20%. , II.Original cost of assets = Rs.1,00,000. III. Residual value of an asset at the end of useful life = Rs.40,960 , Depreciation for the 1st year =


44) Consider the following information :I. Rate of depreciation under the written down method = 20%. , II.Original cost of assets = Rs.1,00,000. III. Residual value of an asset at the end of useful life = Rs.40,960 , Depreciation for the 2 and year =


45) Consider the following information :I. Rate of depreciation under the written down method = 20%. , II.Original cost of assets = Rs.1,00,000. III. Residual value of an asset at the end of useful life = Rs.40,960 , Depreciation for the 3rd year =


46) Consider the following information :I. Rate of depreciation under the written down method = 20%. , II.Original cost of assets = Rs.1,00,000. III. Residual value of an asset at the end of useful life = Rs.40,960 , Depreciation for the 4th year =


47) 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 damages 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 . Depreciation for the 2003-04 year =


48) 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 damages 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 . The amount of depreciation written off on two machines till they were discarded is


49) 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 .Depreciation for 2003-04 =


50) 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 .Depreciation for 2004-05 =


51) 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 .Profit / loss on Sale =


52) Consider the following data pertaining to M/s. E Ltd. Who constructed a cinema house: Cost of second hand furniture Rs.90,000 , Cost of repainting the furniture Rs.10,000 , Wages paid to employees for fixing the furniture Rs.2,000 , fire insurance premium Rs.1,000 The amount debited to furniture account is


53) 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 ful sum-of-the-years-digits method of depreciation , the amount of depreciation charged during the year 2004-05 was


54) On August 01,2002,K travels Ltd. Bought four matador vans costing Rs.1,20,000 each . The company expected to fetch a scrap vale 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 deprecation @ 20% .pea . 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


55) 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 charged 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% pea Profit / loss on Sale =


56) 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 realised 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 come 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 the 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 of depreciation with restrospective effect in respect of the existing items of plant and to make necessary adjustment on 31.12.2003. Closing balance in Plant A/c =


57) 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 realised 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 come 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 the 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 of depreciation with restrospective effect in respect of the existing items of plant and to make necessary adjustment on 31.12.2003. Closing balance in Provision for Depreciation A/c =


58) 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 realised 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 come 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 the 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 of depreciation with restrospective effect in respect of the existing items of plant and to make necessary adjustment on 31.12.2003. Profit and loss on plant sold =


59) 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 realised 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 come 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 the 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 of depreciation with restrospective effect in respect of the existing items of plant and to make necessary adjustment on 31.12.2003. depreciation over/under charged=


60) Glass cutlery etc,:Balance on 01.01.2004 is Rs.28,000.Glass, cutlery ,etc .purchased during the year Rs16,000.Depreciation is to be charged on the above assets as follows -1/5th of theirs 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 01.01.2004,1/2 was 1 year old and 1/2 was 2 year old . purchases are made on 1st January. depreciation for 3rd year =


61) Glass cutlery etc,:Balance on 01.01.2004 is Rs.28,000.Glass, cutlery ,etc .purchased during the year Rs16,000.Depreciation is to be charged on the above assets as follows -1/5th of theirs 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 01.01.2004,1/2 was 1 year old and 1/2 was 2 year old . purchases are made on 1st January. Closing balance in Glass, cutlery account =


62) Depreciation is related to


63) depreciation accounting is


64) depreciation


65) depreciation is


66) fixed asset are stated in the balance sheet


67) depreciation in subsequent year (other than the first year ) is


68) Which of the following is correct ?


69) The main causes of depreciation include


70) the objectives of providing depreciation include


71) the factor effecting the amount of depreciation are


72) the method of recording depreciation are


73) the method of providing depreciation are


74) when the depreciation is recorded by charging to asset account the asset appears


75) when the depreciation is recorded by charging to provision for depreciation account ,the asset


76) depreciable assets are assets which


77) useful life is


78) useful life of a depreciable asset be estimated after considering


79) which of the following is a capital nature ?


80) which of the following is True ?


81) which of the following asset is usually assumed to be not depreciating


82) Consider the following data pertaining to M/s. E Ltd. Who constructed a cinema house: Cost of second hand furniture Rs.90,000 , Cost of repainting the furniture Rs.10,000 , Wages paid to employees for fixing the furniture Rs.2,000 , fire insurance premium Rs.1,000


83) depreciable amount is the


84) in case of a company manufacturing chemicals , land is


85) for depreciating goodwill ,the suitable method is


86) for depreciating plant & machinery ,the suitable method is


87) for depreciating mines,the suitable method is


88) for depreciating leases,the suitable method is


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


90) which of the following is /are false ? I. The term 'depreciation ','depletion' & 'amortization ' convey the same meaning ; II. Provision for depreciation account is debited when provision for depreciation account is created. III. The main purpose of charging the profit & loss account with the amount of depreciation is to spread the cost of an asset over useful life for the purpose of income determination


91) C Ltd . Purchased a second hand machine from a second hand car dealer and made the following payments in the relation to it : Cost as per supplier's list Rs.80,000 ; Less : Agreed discount @ 25% Rs.20,000 , Delivery charges Rs.10,000 , Erection charges Rs.20,000 , Annual maintenance charges Rs.12,000 , Additional components to increase capacity of the machine Rs.10,000 , Annual insurance premium Rs 6,000 . The depreciable amount of the machine is Note :(the estimated residual value at the end of useful life of machine is Rs.40,960)


92) purchase price of machine Rs.80,000 , Installation charges Rs.20,000 ,residual value Rs.40,960 , useful life 4 years .The annual depreciation under SLM is


93) purchase price of machine Rs.80,000 , Installation charges Rs.20,000 ,residual value Rs.40,960 , useful life 4 years .The rate of depreciation under SLM is


94) date of purchase 01.07.2006 , purchase price of machine Rs.80,000 , Installation charges Rs.20,000 ,residual value Rs.40,960 , useful life 4 years, accounting year --financial year .The depreciation under SLM for the year 06-07 will be


95) date of purchase 01.07.2006 , purchase price of machine Rs.80,000 , Installation charges Rs.20,000 ,residual value Rs.40,960 , useful life 4 years, accounting year --financial year; date when machine was put to use 1.10.2006 .The depreciation under SLM for the year 06-07 will be


96) purchase price of machine Rs.1,50,000 , Installation charges Rs.50,000 ,residual value Rs.81,920 ,.The annual depreciation under SLM is Rs.29,520 .the useful life of machine is _______ years


97) purchase price of machine Rs.75,000 , Installation charges Rs.25,000 ,residual value Rs.40,960 ,.The rate of depreciation under SLM is .14.76% .the useful life of machine is _______ years


98) purchase price of machine Rs.1,50,000 , Installation charges Rs.50,000 ,residual value Rs.81,920 ,.The rate of depreciation under SLM is .14.76% .the useful life of machine is _______ years


99) date of purchase 01.07.2006 , purchase price of machine Rs.1,40,000 , Installation charges Rs.60,000 ,residual value Rs.81,920 ,accounting year --financial year; date when machine was put to use 1.10.2006 .The depreciation under SLM for the year 06-07 Rs.14,760 . the useful life of the machine is__years


100) date of purchase 01.07.2006 , purchase price of machine Rs.90,000 , Installation charges Rs.10,000 , useful life 4 years, accounting year --financial year; date when machine was put to use 1.10.2006 .The depreciation under SLM for the year 06-07 Rs.7,380. The residual value of the machine is


101) purchase price of machine Rs.80,000 , Installation charges Rs.20,000 ,residual value Rs.40,960 , useful life 4 years .The rate of depreciation under WDV method is


102) purchase price of machine Rs.1,50,000 , Installation charges Rs.50,000 ,residual value Rs.81,920, useful life 4 years.The amount of depreciation under SLM method for the third year will be


103) date of purchase 01.07.2006 , purchase price of machine Rs.80,000 , Installation charges Rs.20,000 ,residual value Rs.40,960 , useful life 4 years, accounting year --financial year; .The depreciation under WDV method for the year 06-07 will be


104) date of purchase 01.07.2006 , purchase price of machine Rs.80,000 , Installation charges Rs.20,000 ,residual value Rs.40,960 , useful life 4 years, accounting year --financial year; date when machine was put to use 1.10.2006 .The depreciation under WDV method for the year 06-07 will be


105) purchase price of machine Rs.1,50,000 , Installation charges Rs.50,000 ,residual value Rs.81,920 ,.The rate of depreciation under WDV method is .20% .the useful life of machine is _______ years


106) purchase price of machine Rs.1,50,000 , Installation charges Rs.50,000 ,residual value Rs.81,920 ,.The annual depreciation under WDV method is Rs.20,000 .the useful life of machine is _______ years


107) date of purchase 01.07.2006 , purchase price of machine Rs.1,40,000 , Installation charges Rs.60,000 ,residual value Rs.81,920 ,accounting year --financial year; date when machine was put to use 1.10.2006 .The depreciation under WDV method for the year 06-07 Rs.20,000 . the useful life of the machine is__years


108) Original cost = Rs.1,26,000: Salvage value = 6,000 :Useful life = 6 years. Annual Depreciation under SLM


109) Original cost = Rs.1,26,000: Salvage value=6,000:Useful life = 6 years.Depreciation for the 2nd year @10% p.a.under wdv method


110) X purchased a machine of Rs.2,40,000 , Installation charges Rs.20,000 ,residual value after 5 years Rs.10,000 On .1.7.2003 ,expenses for repairs were incurred to the extent of Rs.4,000, depreciation is provided under SLM .depreciation for the 4th year will be


111) Original cost = Rs.1,00,000: Salvage value = 2,000 :Useful life = 5 years. Rate of Depreciation p.a as per SLM is


112) X purchased a machine on 01.01.2007 for Rs.2,40,000 , Installation charges Rs.20,000 ,residual value after 5 years Rs.10,000 On .1.7.2007 ,expenses for repairs were incurred to the extent of Rs.4,000, depreciation is provided under SLM .depreciation rate 10%. depreciation for the 4th year will be


113) X purchased a machine on 01.01.2007 for Rs.2,40,000 , Installation charges Rs.20,000 ,residual value after 5 years Rs.10,000 On .1.7.2007 ,expenses for repairs were incurred to the extent of Rs.4,000, depreciation is provided under WDV method .depreciation rate 10%. depreciation for the 4th year will be


114) In the year 06-07 CAS Ltd. Purchased a new machine and made the following payments in the relation to it : Cost as per supplier's list Rs.10,40,000 ; Less : Agreed discount Rs.1,00,000 , Delivery charges Rs.20,000 , Erection charges Rs.40,000 , Annual maintenance charges Rs.60,000 , Additional components to increase capacity of the machine Rs.80,000 , Annual insurance premium Rs 10,000 . The cost of machine


115) In the year 06-07 CAS Ltd. Purchased a new machine and made the following payments in the relation to it : Cost as per supplier's list Rs.10,40,000 ; Less : Agreed discount Rs.1,00,000 , Delivery charges Rs.20,000 , Erection charges Rs.40,000 , Annual maintenance charges Rs.60,000 , Additional components to increase capacity of the machine Rs.80,000 , Annual insurance premium Rs 10,000 . The depreciation is provided @ 10% p.a. SLM depreciation for 3rd year is


116) In the year 06-07 CAS Ltd. Purchased a new machine and made the following payments in the relation to it : Cost as per supplier's list Rs.10,40,000 ; Less : Agreed discount Rs.1,00,000 , Delivery charges Rs.20,000 , Erection charges Rs.40,000 , Annual maintenance charges Rs.60,000 , Additional components to increase capacity of the machine Rs.80,000 , Annual insurance premium Rs 10,000 . The depreciation is provided @ 10% p.a. WDV depreciation for 3rd year is


117) consider the following information I .Rate of depreciation under the WDV method = 20% , II. Original cost of the asset = Rs.2,00,000 . III. Residual value of the asset at the end of the useful life = Rs.81,920 , The estimated useful life of the asset in the year is


118) consider the following information I .Rate of depreciation under the WDV method = 20% , II. Original cost of the asset = Rs.2,00,000 . III. Residual value of the asset at the end of the useful life = Rs.81,920 ,depreciation for the 3rd year =


119) On Sept. 01,2005 ,KAT travels Ltd. Bought four matador vans costing Rs.2,40,000 each . The company expected to fetch a scrap vale of 25% of the cost price of the vehicles after ten years .The vehicles were depreciated under the fixed installment method up to March 31,2007. with effect from April 01,2007 , the company decided to introduce the diminishing balance method of deprecation @ 20% .pea . instead of the fixed installment method . The company sold one of the vans at Rs.70,000 on March 31 , 2007 .The rate of Depreciation charged up to March 31,2007 was


120) Glass cutlery etc,:Balance on 01.01.2007 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 01.01.2007,1/2 was 1 year old and 1/2 was 2 year old . purchases are made on 1st January. depreciation for 3rd year =


121) Glass cutlery etc,:Balance on 01.01.2007 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 01.01.2007,1/2 was 1 year old and 1/2 was 2 year old . purchases are made on 1st January. closing balance in glass, cutlery account =


122) The balance in the accumulated provision for depreciation account of a company as at the beginning of the year 2006-2007 was Rs.2,00,000 when the original cost of assets amounted to Rs.10,00,000.The company charges 10% depreciation on SLM basis for all the assets including those which have been either purchased or sold during the year . One such assets costing Rs.5,00,000 with accumulated depreciation as at the beginning of the year of Rs.80,000 was disposed off during the year. Depreciation for the year is


123) B Ltd which depreciates its machinery at 10% p.a. on SLM basis had on 1st April 20X6 some balance to the debit of machinery account .It purchased a new machinery for Rs.1,90,000 on 1.8.20X6 after incurring Rs.10,000 .After providing depreciation ,the closing balance of Machinery account as at 31.3.20X7 is Rs.10,30,000 .The original cost of old machines purchased on 1.4.20X4 is


124) B Ltd which depreciates its machinery at 10% p.a. on diminishing balance method had on 1st April 20X6 some balance to the debit of machinery account .It purchased a new machinery for Rs.1,90,000 on 1.8.20X6 & installed the same on 1.10.20X6 after incurring Rs.10,000 .After providing depreciation ,the closing balance of Machinery account as at 31.3.20X7 is Rs.10,64,800 .The original cost of old machines purchased on 1.4.20X4 is


125) On 1st April 20X6 balance of machinery account .Rs.5,17,000 .It was discovered during 06-07 that Rs.25,000 being repairs to machinery incurred on 30 June 20X4 had been capitalised.after rectification & depreciation @ 20 % p.a on reducing balance the balance of Machinery account as at 31.3.20X7 will be


126) On 1st April 20X6 balance of machinery account .Rs.4,17,200 .It was discovered during 06-07 that Rs.50,000 being cost of generator purchased on 1st oct 20X3 had been written off to stores.after rectification & depreciation @ 20 % p.a on reducing balance the balance of Machinery account as at 31.3.20X7 will be


127) date of purchase 01.01.2005 , purchase price of machine Rs.80,000 , Installation charges Rs.20,000 on 30th sept.2006 ,this machine was sold for Rs.50,000 depreciation is to provided @20% p.a according to SLM accounts are closed on 31st march each year .The loss on sale of machine is


128) date of purchase 01.01.2005 , purchase price of machine Rs.80,000 , Installation charges Rs.20,000 on 30th sept.2006 ,this machine was sold for Rs.50,000 depreciation is to provided @20% p.a according to WDV accounts are closed on 31st march each year .The loss on sale of machine is


129) On 1st April 20X6 balance of machinery account .Rs.5,36,000 . A machine cost that cost Rs.4,00,000 on 30.09.20X5 were scraped & replaced on 31.12.20X6 with new one by spending Rs.60,000 .Scrap realised Rs.10,000 . After depreciation @ 20 % p.a on reducing balance the balance of Machinery account as at 31.3.20X7 will be


130) K Ltd.imported a machine on 01.07.2005 ,for Rs.1,28,000 , paid custom duty & freight Rs.64,000 & incurred erection Rs.48,000 .Another local machinery costing Rs.80,000 was purchased on 1.1.2006.On 1.7.2007 , a portion of the imported machinery (value 1/3) got out of order & was sold for Rs.27,840.Another machinery was purchased to replace the same for Rs.40,000.Depreciation has been provided @ 20% p.a.The loss on sale of machine & closing balance of machinery account will be


131) in the books of D ltd the machinery account shows a debit balance of Rs.1,20,000 as on April 1 , 2005 .the machinery was sold on september 30 , 2006 for Rs.60,000.the company charged depreciation @20% p.a.on diminishing balance method.Depreciation for 06-07 & loss on sales will be


132) On October 1,2003 two machines costing Rs.40,000 and Rs.30,000 respectively, were purchased. On march 31, 2007, both the machines had to be discarded because of damage and had to be replaced by two machines costing Rs.50,000 and Rs.40,000 respectively . One of the discarded machine was sold for Rs.12,000 and against the other it was expected that Rs.10,000 would be realized . The firm provides depreciation @15% on written down value . Depreciation for the 2005-06 year =


133) On October 1,2003 two machines costing Rs.40,000 and Rs.30,000 respectively, were purchased. On march 31, 2007, both the machines had to be discarded because of damage and had to be replaced by two machines costing Rs.50,000 and Rs.40,000 respectively . One of the discarded machine was sold for Rs.12,000 and against the other it was expected that Rs.10,000 would be realized . The firm provides depreciation @15% on written down value .. The amount of depreciation written off on two machines till they were discarded is


134) date of purchase of machine 1.04.2004 . Cost Rs.12,00,000. Rate of depreciation : 10% p.a. on SLM .The closing balance of provision for depreciation account as of 31.03.2007 will be


135) date of purchase of machine 1.04.20X4 . Cost Rs.12,00,000 .Rate of depreciation : 10% p.a. on WDV .The closing balance of provision for depreciation account as of 31.03.2007 will be


136) date of purchase of machine 1.04.20X4 . Cost Rs.12,00,000 .Rate of depreciation : 10% p.a. on SLM . ON 1.10.2006 .a new machinery was purchased for Rs.80,000. .The closing balance of provision for depreciation account as of 31.03.2007 will be


137) date of purchase of machine 1.04.20X4 . Cost Rs.12,00,000 .Rate of depreciation : 10% p.a. on SLM . ON 1.10.2006 .a part of machinery was purchased on 1.4.2004 for Rs.80,000.& was sold for Rs.45,000 .The closing balance of provision for depreciation account as of 31.03.2007 will be


138) date of purchase of machine 1.04.20X4 . Cost Rs.12,00,000 .Rate of depreciation : 10% p.a. on WDV . ON 1.10.2006 .a new machinery was purchased for Rs.80,000. .The closing balance of provision for depreciation account as of 31.03.2007 will be


139) Date of purchase of machine 1.04.20X4 . Cost Rs.12,00,000. Rate of depreciation : 10% p.a. on WDV . ON 1.10.2006. A part of machinery was purchased on 1.4.2004 for Rs.80,000.& was sold for Rs.45,000.The closing balance of provision for depreciation account as of 31.03.2007 will be


140) On 1.4.2004 , X ltd purchase machine for. Cost Rs.12,00,000 .Rate of depreciation : 10% p.a. on original cost . ON 1.10.2006 .a part of machinery was purchased on 1.4.2004 for Rs.80,000.& was sold for Rs.45,000 & new machinery at a cost of Rs.80,000 was purchased & installed on the same date .The closing balance of provision for depreciation account as of 31.03.2007 will be


141) On 1.4.2004 , X ltd purchase machine for. Cost Rs.12,00,000 .Rate of depreciation : 10% p.a. on WDV . ON 1.10.2006 .a part of machinery was purchased on 1.4.2004 for Rs.80,000.& was sold for Rs.45,000 & new machinery at a cost of Rs.80,000 was purchased & installed on the same date .The closing balance of provision for depreciation account as of 31.03.2007 will be


142) On 1st Jan 2001 Bharat Ltd purchased a machine for Rs.10,000 & provided depreciation @ 10 % .At the end of 2004 the company decided to change the method of depreciation from SLM of WDV retrospectively ,the rate of depreciation remaining the same. On account of changed method of depreciation


143) On 1st Jan 2001 Tushart Ltd purchased a machine for Rs.20,000 & provided depreciation @ 10 % .At the end of 2004 the company decided to change the method of depreciation from WDV of SLM retrospectively ,the rate of depreciation remaining the same. On account of changed method of depreciation


144) B ltd .which depreciates its machinery at 10% p.a SLM had on 1.4.2004 Rs.14,000 to the debit of machinery account .On 31st march 2005,the company decided to change the method of depreciation to diminishing balance method with effect from 1.4.,the rate of depreciation remaining the same .prepare the machinery account for the year 04-05 .On account of changed method of depreciation


145) T ltd .which depreciates its machinery at 10% p.a DBM had on 1.4.2004 Rs.29,160 to the debit of machinery account .On 31st march 2005,the company decided to change the method of depreciation to SLM with effect from 1.4.2001,the rate of depreciation remaining the same.On account of changed method of depreciation


146) cost of lease paid Rs.20,000 , annuity factor @ 5% interest for 4 year is Re.0.2820.The net charge to profit & loss account is


147) cost of lease paid Rs.20,000 , annuity factor @ 5% interest for 4 year is Re.0.2820. Refundable deposit of Rs.2,000 after 4 years.The net charge to profit & loss account is


148) Original cost = Rs.1,26,000: Salvage value=6,000:. If unit produced in 2nd year was 5,000 & total estimated production 50,000 Depreciation for the 2nd year


149) A new machine costing Rs.2 lakh was purchased by a company to manufacture a special product. Its useful life is estimated to be above 5 years and scrap value at Rs.20,000.The production plan for the next 5 years using the above machine is as follows :Year 1, 5,000 units , Year 2, 10,000 units , Year 3, 12,000 units , Year 4, 20,000 units , Year 5, 25,000 units ,;The depreciation expenditure for the 4th year under units-of-production method will be


150) X ltd purchased a machine for Rs.2,20,000 on 1st Jan 2001 & incurred Rs.40,000 towards freight . Insurance , carriage inwards & installation charges .It was estimated that the machinery will have a scrap value of Rs.20,000 at the end of its useful life which is 10 years of 12,000 hrs each .X ltd decided to depreciate the machine on 'machine hour rate method' .The machine hours during first six years were year -2001 machine hours 6,000 ; year -2002 machine hours 8,000 year -2003 machine hours 10,000 year -2004 machine hours 14,000 year -2005 machine hours 14,000 year -2006 machine hours 12,000.The depreciation for the year 2006 will be


151) X ltd purchased a machine for Rs.2,00,000 on 1st Apr 2001 & incurred Rs.14,000 towards freight . Insurance Rs.2,000 , carriage inwards & Rs.4,000 to installation charges .It was estimated that the machinery will have a scrap value of Rs.20,000 at the end of its useful life which is 4 years .On 1st April 2004 Rs.4,000 were incurred on repairs & renewals of machine. The amount of depreciation for the 4th year according to the Sum of years digits method will be


152) Original cost = Rs.1,36,000: Salvage value = 10,000 :Useful life = 6 years. Depreciation for the 1st year according to the Sum of years digits method will be


153) Original cost = Rs.1,36,000: Salvage value = 10,000 :Useful life = 6 years. Depreciation for the 4th year according to the Sum of years digits method will be


154) X ltd purchased a machine for Rs.1,20,000 on 1st Jan 2001 & incurred Rs.40,000 towards freight . Insurance , carriage inwards & installation charges .It was estimated that its life is 4 years during which period is sum of Rs. 60,000 is likely to be spent on its repairs & maintenance & at the end of useful life the a scrap value of Rs.20,000 .actual repairs were as under 2001 - nil ; year -2002 Rs.10,000 year -2003 Rs.20,000 year -2004 Rs.30,000 At the end of useful life , the scrap value of the machine realised Rs.16,000 only. The closing balance of provision for depreciation for 31.12.2002 will be


155) Under ______ system, amount of depreciation amount changes every year.


156) Balance of depreciation account is transferred to __________ account.


157) Under ____________ system, the amount of depreciation remains constant every year.


158) Gradual and permanent decrease in the value of asset is known as ___________.


159) Under the __________ system of depreciation, the amount of depreciation does not change


160) The amount of depreciation goes on decreasing every year under the __________ method of depreciation.


161) Depreciation = Cost of asset less scrap value divided by Estimated working _______ of assets.


162) By the amount of depreciation, the value of asset _________.


163) The physical wear and tear in an asset is called ________.


164) Under F.I.M. value of asset becomes ______ at the end of its useful life.


165) Fixed installment method of depreciation is also known as _________.


166) Under __________ method, depreciation is calculated on the reducing value of an asset in each successive year.


167) Depreciation account is a ___________ account.


168) In fixed installment system the amount of depreciation is __________ every year.


169) Depreciation is charged on ___________ asset.


170) Under fixed installment method of depreciation, depreciation is charged on _______ asset.


171) Under _________ method, depreciation is calculated on written down value.


172) Under reducing balance method of depreciation is charged on __________.


173) Wages paid for installation of machinery should be debited to _______ account.


174) Under __________ method, depreciation is calculated on the original cost of an asset at the end of each year.


175) Depreciation charged on the asset is a business _________.


176) Depreciation is the ________ in the value fixed asset due to its wear and tear.


177) Loss on the sale of machinery is _______ to machinery account.


178) The balance of an asset is never reduced to zero under _________ method.


179) Balance of asset is reduced to zero under ___________ method at the end of its useful life.


180) If the selling price is lesser than _______ there is a loss on sale of fixed asset.


181) The money value which is obtained after selling an asset is called __________.


182) Cost of asset = Purchase price + ______.


183) Amount received on sale of asset is debited to _________ account.


184) Amount spent on installation of machinery is a __________ expenditure.


185) The profit or loss on the sale of an asset is transferred to _______ account.


186) In R.B.M of depreciation the ________ of depreciation is fixed.


187) Profit on sale of machinery is ________ to machinery account.


188) The word "depreciation" is derived from the Latin word________


189) Depreciation is _______ in the value of asset.


190) All the _______ assets depreciate.


191) Under _______ system, amount of depreciation changes every year.


192) The amount of depreciation goes on decreasing under ________method.


193) At the end of the year, depreciation is transferred to _______ Accounts.


194) The method in which depreciation remains constant is known as _______ Method.


195) In fixed installment method the amount of depreciation is _______ year after year.


196) P & L A/c is _______ by the amount of depreciation.


197) In reducing balance method the amount of depreciation _______ year after year.


198) Fixed installment method is used for assets like______.


199) _____ indicates merely a temporary decrease or increase in value.


200) Depreciation is not an______ of profit but, is a charge on profit.


201) The avoidance of charging depreciation render the profit______.


202) The object of providing depreciation is to set aside a certain sum every year to_____that asset when it is unserviceable.


203) Depreciation is essential to arrive at a true_____ or _____.


204) Under straight line method the assets is reduced to its_____by the end of its estimated life.


205) Under the system of depreciation, the amount of depreciation does not change from year to year.


206) Balance of depreciation account is transferred to_______.


207) Under _____ system, the amount of depreciation remains constant every year.


208) Under_____ method, depreciation is calculated on written down value.


209) Under reducing balance method, the annual depreciation decreases year after year.


210) Amount spent for installation of machinery is debited to installation charges A/c.


211) Profit cannot be calculated properly unless depreciation is provided.


212) Depreciation increases the value of asset.


213) It is not necessary to depreciate a building or asset if it is not in use.


214) Under the Fixed Instalment Method of depreciation the amount of depreciation is a certain percentage of the original cost.


215) The expenditure incurred on installation of machinery is revenue expenditure.


216) The profit or loss on sale of fixed asset can be ascertained only after the depreciation is calculated.


217) Depreciation is provided on current asset only.


218) There is no need to charge depreciation, if fixed asset is maintained with proper care.


219) Depreciation need not be charged when business is making losses.


220) Depreciation is provided to allocate the cost of assets over its useful life.


221) Balance of Depreciation A/c is transferred to Profit and Loss A/c.


222) Residual value affects the amount of depreciation per annum.


223) Installation charges incurred on a fixed asset are included in its cost.


224) Under Reducing Balance system the amount of depreciation remains constsnt.


225) Wages paid for erection of Machinery should be debited to wages A/c.


226) Depreciation is provided on fixed as well as current asset.


227) In straight line method of depreciation the amount of depreciation remains ________ every year.


228) Wages paid for installation charges of machinery, debited to ________ account.


229) Reserves arising from capital receipts are known as _______.


230) A provision is ________.


231) Depreciation arises because of ________.


232) The amount of depreciation, charged on machinery is debited to ________ account.


233) The profit on sale of an asset is debited to ________ account.


234) The amount of depreciation goes on decreasing in every year under the ________ method.


235) The amount realized at the end of working life of an asset is _________.


236) Written Down Value method is also called as _________.


237) Provisions can be created for _______.


238) _________ is not an objective of creating reserves.


239) _________ is not an example of capital reserve.


240) Depreciation is a measure of the wearing out, consumption or other loss of a depreciation asset arising from _______.


241) Depreciation is a ________ shrinkage in the book value of a fixed asset.


242) Depreciation is generally provided on ________.


243) On which of the following asset depreciation cannot be provided?


244) Depreciation is the fall in the ________ of a fixed asset through physical wear and tear due to use or passage of time or from any other cause.


245) Depreciable assets are assets which _____.


246) _________ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined."


247) Depreciation Accounting has been defined by the _________ as "a system of accounting which aims to distribute the cost or other basic value of tangible capital assets less salvage (if any) over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation and not of valuation."


248) Which of the following is/are important characteristics of depreciation?


249) Which of the following is/are important characteristics of depreciation?


250) Which of the following is/are important characteristics of depreciation?


251) Which of the following is/are not important characteristics of depreciation?


252) The fundamental objective of depreciation is/are ________.


253) Which of the following is/are cause for providing depreciation?


254) Which of the following is/are cause for providing depreciation?


255) Which of the following is/are cannot be treated as cause for providing depreciation?


256) Which of the following is/are the objectives of providing depreciation?


257) Which of the following is/are the objectives of providing depreciation?


258) Which of the following is/are the objectives of providing depreciation?


259) Which of the following is/are not the objectives of providing depreciation?


260) Which of the following factor affect measurement of depreciation?


261) Which of the following statement is incorrect?


262) Under which of following method depreciation is charged uniformly?


263) Under which of following method depreciation is charged uniformly?


264) Under which of following method depreciation is not charged uniformly?


265) Under which of following method depreciation is not charged uniformly?


266) Under which of following method depreciation charged declines?


267) Under which of following method depreciation charged does not decline?


268) Under which of following method depreciation charged does not decline?


269) Under which of following method depreciation charged does not decline?


270) Under which of following method depreciation charged does not decline?


271) ______ method, a fixed proportion of the original cost of the asset is written off each year so that asset account may be reduced to its residual value at the end of its estimated economic useful life.


272) Which of the following is correct formula for charging depreciation under fixed installment method?


273) Which of the following is/are advantage of fixed installment method of charging depreciation?


274) Which of the following is/are, cannot be treated as advantage of fixed instalment method of charging depreciation?


275) Which of the following is/are disadvantage of fixed instalment method of charging depreciation?


276) Depreciation fund method is also known as _______.


277) ________ method, the amount of depreciation is ascertained in such a way, that if invested every year with compound interest, it will yield an amount equal to the cost of asset.


278) ________ is a method of depreciation which takes into account the element of interest on capital outlay and seeks to write off the value of the asset as well as the interest lost over the life of the asset.


279) Under annuity method amount of depreciation _________.


280) Under _______ method depreciation is provided as a fixed percentage of the written down value of the asset.


281) Which of the following is/are advantage of reducing balance method/WDV method?


282) _______ is a method of accelerated depreciation that allocates larger amounts of depreciation as an expense during the earlier years of the life of an asset.


283) ________ method is applicable in case of wasting assets, e.g., mines, quarries, oil well etc.


284) Under ________ method depreciation is calculated on the basis of hours worked during the year by the machine.


285) In case of assets of small value or if the life of the asset cannot be accurately determined ________.


286) Where the life of the asset is uncertain ______ method of depreciation is applied.


287) For which of the following Inventory system of depreciation can be applied?


288) For charging depreciation, on which of the following assets, the depletion method is adopted?


289) The portion of the acquisition cost of the asset, yet to be allocated is known as _______.


290) Which of the following is odd one?


291) Which of the following is odd one with reference to depreciation?


292) A change in accounting policy e.g. Change in method of depreciation is justified _____.


293) According to AS-6 "Depreciation Accounting", issued by the ICAI change in method is permitted ________.


294) Z Ltd. Acquired machinery on 1st January,2011 at a cost of Rs.72,000 and spent Rs.8,000 for its installation. The firm writes off depreciation at 10% p.a. On the original cost every year. Depreciation for 1st & 2nd year as fixed instalment method will be Rs. _______.


295) Z Ltd. Acquired machinery on 1st January,2011 at a cost of Rs.72,000 and spent Rs.8,000 for its installation. The firm writes off depreciation at 10% p.a. On the original cost every year. Closing balance of machinery for 1st & 2nd year as fixed instalment method will be Rs. ______.


296) K & Co. Acquired machinery on 1st July,2012 at a cost of Rs.45,000 and spent Rs.5,000 for its installation. The firm writes off depreciation at 10% p.a. On the original cost every year. The books are closed on 31st March, every year. Depreciation for the year ended 31st March,2012 & 31st March,2013 will be Rs. _________ & Rs. ________.


297) Z Ltd purchased a machine on 01.01.2012 for Rs.12,000. Installation expenses were Rs. 1,000. Residual value after 5 years Rs.500. Depreciation is provided under SLM. Depreciation rate is 10% p.a. Annual depreciation= ?


298) N Ltd. Purchase machinery for Rs.10,00,000 on 01.01.2012. Installation expenses were Rs.50,000. Life of the asset is 6 years at the end of which asset can be sold at Rs.30,000. Annual depreciation under straight line method will be= ?


299) Original cost = Rs.1,76,400. Salvage value= Rs.8,400. Useful Life = 6 years. Annual depreciation under SLM = ?


300) Original cost = Rs.12,00,000. Salvage value= Rs.2,00,000. Useful Life = 10 years. Annual depreciation = ? And rate of depreciation = ?


301) Machinery costing Rs.20,00,000 was purchased on 1.4.2012. The installation charges amounting Rs.5,00,000 were incurred. The depreciation at 10% p.a. On straight line method for the year ended 31st March,2013 will be _________.


302) A Ltd. acquired a machine on 1st January, 2010 at a cost of Rs.14,000 and spent Rs.1,000 on its installation. The firm writes off depreciation at 10% p.a. Of the original cost every year. The books are closed on 31st December every year. After 3 years machine sold for Rs.9,000. Profit / Loss on sale = ?


303) B Ltd. acquired a machine on 1st January,2010 at a cost of Rs.14,000 and spent Rs.1,000 on its installation. The firm writes off depreciation at 10% p.a. Of the original cost every year. The books are closed on 31st December, every year. After 3 years machine sold for Rs.13,000. Profit/Loss on sale = ?


304) C Ltd. acquired a machine on 1st January, 2010 at a cost of Rs.14,000 and spent Rs.1,000 on its installation. The firm writes off depreciation at 10% p.a. Of the original cost every year. The books are closed on 31st December every year. On 31st May, 2013 machine sold for Rs.8,000. Profit/Loss on sale = ?


305) Hi-Fi Ltd acquired machinery on 1st January,2012 at a cost of Rs.36,000 and spent Rs.4,000 for its installation. The firm writes off depreciation at 10% p.a. On WDV basis. The books are closed on 31st December. Depreciation for 1st & 2nd year will be Rs. ________ & Rs. _______.


306) Hi-Fi Ltd acquired machinery on 1st January,2012 at a cost of Rs.36,000 and spent Rs.4,000 for its installation. The firm writes off depreciation at 10% p.a. On WDV basis. The books are closed on 31st December. Closing balance of machinery account for 1st & 2nd year will be Rs. _______ & Rs. _______.


307) A firm acquired machinery on 1st July, 2011 at a cost of Rs.45,000 and spent Rs.5,000 for its installation. The firm writes off depreciation at 10% per annum on diminishing balance method. The books are closed on 31st March,2012 & 31st March,2013 will be Rs. _______ & Rs. ________.


308) Y Ltd purchased a machine on 1.1.2012 for Rs.12,000. Installation expenses were Rs.1,000. Residual value after 5 years Rs.500. Depreciation is provided under WDV. Depreciation rate is 20%. Depreciation for 3rd year = ?


309) N Ltd. Purchase machinery for Rs.1,00,000 on 01.01.2012. Installation expenses were Rs.10,000. Life of the asset is 5 years at the end of which asset can be sold at Rs.5,000. Depreciation rate is 15% on WDV. Depreciation for 4th year = Rs. _______.


310) T Ltd acquired a machine on 1st January,2010 at a cost of Rs.1,40,000 and spent Rs.10,000 on its installation. The firm writes off depreciation at 15% p.a. WDV. The books are closed on 31st December every year. After 3 years machine sold for Rs.87,000. Profit/Loss on sale = ?


311) S Ltd acquired a machine on 1st January,2010 at a cost of Rs.1,40,000 and spent Rs.10,000 on its installation. The firm writes off depreciation at 15% p.a. on WDV. The books are closed on 31st December every year. After 3 years machine sold for Rs. 97,000. Profit/ Loss on sale = ?


312) V Ltd acquired a machine on 1st July, 2010 at a cost of Rs.15,000. The firm writes off depreciation at 10% p.a. On WDV. The books are closed on 31st March every year. On 30th June,2013 machine sold for Rs.8,000. Profit/Loss on sale = ?


313) Life of an asset is 5 years, Purchase cost-Rs.5,70,000, Installation charges - Rs.30,000. Depreciation as per sum of years digit method for 4th year = ?


314) Original cost = Rs.1,26,000 ; Salvage value = Nil ; Useful life = 6 years. Depreciation for the first year under sum of years digits method will be _________.


315) N Ltd purchased a machinery on April, 1, 2008 for Rs.6,00,000. 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 year digit method of depreciation, the amount of depreciation charged during the year 2012-13 was _________.


316) Under sum of year digit method depreciation year by year _________.


317) M/s NZ & Co. Purchased a machine for Rs.10,00,000. Estimated useful life and scrap value were 10 years and Rs.1,20,000 respectively. The machine was put to use on 1.1.2001. If the company follows sum of year digit method of depreciation, the amount of depreciation charged during the year 2007 & 2008 was _______ & _______.


318) Original cost = Rs.2,01,600.. Salvage value = 9,600. Depreciation for 2nd year by machine hour rate method, if hours for 2nd year was Rs.8,000 and total estimated hours are 80,000.


319) A new machine costing Rs.1,00,000 was purchased by a company on 1st April,2011. Its useful life is estimated to be 5 years and scrap value at Rs.10,000. The production hours for the next 5 years is as follows:Year Hours2011-12 5,0002012-13 10,0002013-14 12,0002014-15 20,0002015-16 25,000Depreciation for year 2013-14 = ?


320) Life of an asset is 5 years, Purchase cost: Rs.6,70,000 , Installation charges: Rs.30,000 , Salvage value: Rs.50,000. Total estimated hours machine will work for the 5 years-25,000 hours. If machine works for 5,000 & 8,000 hours in 1st & 2nd year, depreciation as per machine hour rate method will be _______ & _______.


321) Original cost=Rs.1,26,000. Salvage value=6,000. Depreciation for 2nd year by units of production method, if units produced in 2nd year was 5,000 and total estimated production 50,000.


322) Original cost=Rs.7,50,000. Installation charges=1,00,000, Salvage value=50,000, Depreciation for 3rd year by units of production Method, if units produced in 3rd year was 40,000 and total estimated production 2,00,000.


323) Z Ltd purchased a machine having life of 3 years on 1st April,2008 for Rs.50,000. It is decided to provide for the replacement of the machine at the end of 3 years by setting-up a sinking fund. Investment will fetch interest at 12% p.a. Sinking fund tables shows that Rs.0.296349 invested each year will produce Re.1 at the end of 3 years at 12% p.a. The investments are sold for Rs.28,500.Depreciation to be provided for each year=?


324) Z Ltd purchased a machine having life of 3 years on 1st April,2008 for Rs.50,000. It is decided to provide for the replacement of the machine at the end of 3 years by setting-up a sinking fund. Investment will fetch interest at 12% p.a. Sinking fund tables shows that Rs.0.296349 invested each year will produce Re.1 at the end of 3 years at 12% p.a. The investments are sold for Rs.28,500.Interest for the year ended 31st March,2010=?


325) Z Ltd purchased a machine having life of 3 years on 1st April,2008 for Rs.50,000. It is decided to provide for the replacement of the machine at the end of 3 years by setting-up a sinking fund. Investment will fetch interest at 12% p.a. Sinking fund tables shows that Rs.0.296349 invested each year will produce Re.1 at the end of 3 years at 12% p.a. The investments are sold for Rs.28,500.Interest for the year ended 31st March,2011=?


326) Z Ltd purchased a machine having life of 3 years on 1st April,2008 for Rs.50,000. It is decided to provide for the replacement of the machine at the end of 3 years by setting-up a sinking fund. Investment will fetch interest at 12% p.a. Sinking fund tables shows that Rs.0.296349 invested each year will produce Re.1 at the end of 3 years at 12% p.a. The investments are sold for Rs.28,500.Sinking Fund Investment Account balance for the year ended 31st March,2010=?


327) Z Ltd purchased a machine having life of 3 years on 1st April,2008 for Rs.50,000. It is decided to provide for the replacement of the machine at the end of 3 years by setting-up a sinking fund. Investment will fetch interest at 12% p.a. Sinking fund tables shows that Rs.0.296349 invested each year will produce Re.1 at the end of 3 years at 12% p.a. The investments are sold for Rs.28,500.Sinking Fund Investment Account balance for the year ended 31st March,2011 = ?


328) Z Ltd purchased a machine having life of 3 years on 1st April,2008 for Rs.50,000. It is decided to provide for the replacement of the machine at the end of 3 years by setting-up a sinking fund. Investment will fetch interest at 12% p.a. Sinking fund tables shows that Rs.0.296349 invested each year will produce Re.1 at the end of 3 years at 12% p.a. The investments are sold for Rs.28,500. Loss on sale of investment for the year ended 31st March,2011=?


329) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Depreciation to be provided for each year=?


330) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Interest for the year ended 31st March,2011=?


331) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Interest for the year ended 31st March,2012=?


332) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Interest for the year ended 31st March,2013=?


333) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Interest for the year ended 31st March,2014=?


334) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Balance of lease account for the year ended 31st March,2011=?


335) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Balance of lease account for the year ended 31st March,2012=?


336) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Balance of lease account for the year ended 31st March,2013=?


337) NS Ltd purchased a leasehold property on 1st April,2010 for 5 years at a cost of Rs.7,50,000. It decided to write off the lease by annuity method presuming the rate of interest at 14% is Rs.0.291284. Calculations to be made to the nearest rupee.Balance of lease account for the year ended 31st March,2014=?


338) N Ltd purchase machine for Rs.4,75,000 on 1.1.2010 and spent Rs.25,000 on its installation. Rate of depreciation 10% on SLM. Company charge depreciation on SLM up to year ended 31.12.2014. In year 2015 the company wants to change its method of depreciation from SLM to WDV w.e.f. 1.1.2010. To effect the change in method machinery account will be ________.


339) A firm, which depreciates its machinery at 10% p.a. on WDV method, had on 1st April,2002 Rs.9,72,000 in the debit of machinery account. During the year ended 31st March,2003, a part of the machinery purchased on 1st April,2000 for Rs.80,000 was sold for Rs.45,000 on 1st October,2002 and a new machinery at a cost of Rs.1,50,000 was purchased and installed on the same date, installation charges being Rs.8,000. On 31st March,2003, the firm decided to change its method of charging depreciation from WDV method to SLM with effect from April,2000 the rate of depreciation remaining the same as before.Depreciation on machine sold up to 1.10.2002 in year 2002-2003 will be Rs. _______.


340) A firm, which depreciates its machinery at 10% p.a. on WDV method, had on 1st April,2002 Rs.9,72,000 in the debit of machinery account. During the year ended 31st March,2003, a part of the machinery purchased on 1st April,2000 for Rs.80,000 was sold for Rs.45,000 on 1st October,2002 and a new machinery at a cost of Rs.1,50,000 was purchased and installed on the same date, installation charges being Rs.8,000. On 31st March,2003, the firm decided to change its method of charging depreciation from WDV method to SLM with effect from April,2000 the rate of depreciation remaining the same as before.Loss on machine sold on 1.10.2002 in year 2002-2003 will be Rs. ________.


341) A firm, which depreciates its machinery at 10% p.a. on WDV method, had on 1st April,2002 Rs.9,72,000 in the debit of machinery account. During the year ended 31st March,2003, a part of the machinery purchased on 1st April,2000 for Rs.80,000 was sold for Rs.45,000 on 1st October,2002 and a new machinery at a cost of Rs.1,50,000 was purchased and installed on the same date, installation charges being Rs.8,000. On 31st March,2003, the firm decided to change its method of charging depreciation from WDV method to SLM with effect from April,2000 the rate of depreciation remaining the same as before. Extra depreciation due to change in method will be _________.


342) A firm, which depreciates its machinery at 10% p.a. on WDV method, had on 1st April,2002 Rs.9,72,000 in the debit of machinery account. During the year ended 31st March,2003, a part of the machinery purchased on 1st April,2000 for Rs.80,000 was sold for Rs.45,000 on 1st October,2002 and a new machinery at a cost of Rs.1,50,000 was purchased and installed on the same date, installation charges being Rs.8,000. On 31st March,2003, the firm decided to change its method of charging depreciation from WDV method to SLM with effect from April,2000 the rate of depreciation remaining the same as before.Closing balance of machinery account will be Rs. ________.


343) The amount of annual depreciation remains constant year after year under


344) Which method is followed to have a uniform charge for depreciation & repairs & maintenance together


345) Original cost = Rs.12,60,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year under sum of years digits method will be


346) The main objective of providing depreciation is to


347) Original cost of a machine was Rs.25,20,000 salvage value was Rs.1,20,000, useful life was 6 years. Annual depreciation under Straight Line Method


348) The cost of a machine is Rs.20,00,000. Two years later the book value is Rs.10,00,000. The Straight-line percentage depreciation is


349) Original cost Rs.13,00,000, Salvage value Rs.40,000, Useful life 6 years. Depreciation for the first year under sum-of-years digit methods will be


350) Which of the following assets does not depreciate?


351) A company purchased a machinery on April 01, 2010, for Rs.15,00,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. The depreciation charged during the year 2014-15 was


352) If the equipment account has a balance of Rs.22,50,000 and the accumulated depreciation account has a balance of Rs.14,00,000, the book value of the equipment is