Practice Test

Q1) 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 = Show Answer

Q2) 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 Show Answer

Q3) 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. Show Answer

Q4) 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 = Show Answer

Q5) 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 Show Answer

Q6) Original cost =Rs.1,26,000: Salvage value=6,000 .Depreciation for the 2nd year @ units of production method, if units produced in the 2nd year was 5,000 and total estimated production 50,000 Show Answer

Q7) The number of production or similar units expected to be obtained from the use of an asset by an enterprise is called as Show Answer

Q8) Which of the Following term is not True with regards to fixed assets ? Show Answer

Q9) Original cost =Rs.1,26,000: Salvage value = 6,000 :Useful life = 6 years. Annual Depreciation under SLM Show Answer

Q10) Original cost = Rs.1,26,000: Salvage value = 6,000.Depreciation for the 2nd year @10% p.a.under wdv method Show Answer

Q11) Which of the following expenses is not included in the cost of a plant and equipment ? Show Answer

Q12) For charging depreciation, on which of the following assets , the depletion method is adopted ? Show Answer

Q13) 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 Show Answer

Q14) In the case of downward revaluation of an asset which is for the first time revalued , the account to be debited is Show Answer

Q15) In which of the following methods , is the cost of the asset written off in equal proportions during its useful economic life ? Show Answer

Q16) The portion of the acquisition cost of the assets , yet to be allocated is known as Show Answer

Q17) Original cost =Rs.1,00,000: Expected Salvage value=2,000 :Useful life=5 years. Depreciation for 3rd year as per SLM is Show Answer

Q18) Original cost =Rs.1,00,000: Expected Salvage value=2,000 :Useful life=5 years. Rate of Depreciation p.a. is Show Answer

Q19) 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 = Show Answer

Q20) 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= Show Answer

Q21) 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 = Show Answer

Q22) 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 under new method for 2002-2003 , 2003-04 = Show Answer

Q23) 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 Show Answer

Q24) 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 Show Answer

Q25) 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 = Show Answer

Q26) 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 Show Answer

Q27) 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 Show Answer

Q28) 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 Show Answer

Q29) 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 Show Answer

Q30) 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 Show Answer

Q31) 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 Show Answer

Q32) 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 Show Answer

Q33) 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 Show Answer

Q34) 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 Show Answer

Q35) 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 Show Answer

Q36) 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 Show Answer

Q37) 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 Show Answer

Q38) 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 Show Answer

Q39) 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 Show Answer

Q40) 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 Show Answer

Q41) 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 Show Answer

Q42) 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 Show Answer

Q43) 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 Show Answer

Q44) 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 = Show Answer

Q45) 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 = Show Answer

Q46) 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 = Show Answer

Q47) 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 = Show Answer

Q48) 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 = Show Answer

Q49) 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 Show Answer

Q50) 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 = Show Answer

Q51) 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 = Show Answer

Q52) 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 = Show Answer

Q53) 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 Show Answer

Q54) 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 Show Answer

Q55) 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 Show Answer

Q56) 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 in provision method = Show Answer

Q57) 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 = Show Answer

Q58) 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 = Show Answer

Q59) 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= Show Answer

Q60) 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 = Show Answer

Q61) 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 = Show Answer

Q62) Depreciation is related to Show Answer

Q63) depreciation accounting is Show Answer

Q64) depreciation Show Answer

Q65) depreciation is Show Answer

Q66) fixed asset are stated in the balance sheet Show Answer

Q67) depreciation in subsequent year (other than the first year ) is Show Answer

Q68) Which of the following is correct ? Show Answer

Q69) The main causes of depreciation include Show Answer

Q70) the objectives of providing depreciation include Show Answer

Q71) the factor effecting the amount of depreciation are Show Answer

Q72) the method of recording depreciation are Show Answer

Q73) the method of providing depreciation are Show Answer

Q74) when the depreciation is recorded by charging to asset account the asset appears Show Answer

Q75) when the depreciation is recorded by charging to provision for depreciation account ,the asset Show Answer

Q76) depreciable assets are assets which Show Answer

Q77) useful life is Show Answer

Q78) useful life of a depreciable asset be estimated after considering Show Answer

Q79) which of the following is a capital nature ? Show Answer

Q80) which of the following is True ? Show Answer

Q81) which of the following asset is usually assumed to be not depreciating Show Answer

Q82) the no.of production or similar units expected to be obtained from the use of an asset by an enterprise is called as Show Answer

Q83) 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 Show Answer

Q84) depreciable amount is the Show Answer

Q85) in case of a company manufacturing chemicals , land is Show Answer

Q86) The amount of annual depreciation remains constant year after year under Show Answer

Q87) Which method is followed to have a uniform charge for depreciation & repairs & maintenance together Show Answer

Q88) for depreciating goodwill ,the suitable method is Show Answer

Q89) for depreciating plant & machinery ,the suitable method is Show Answer

Q90) for depreciating mines,the suitable method is Show Answer

Q91) for depreciating leases,the suitable method is Show Answer

Q92) In which of the following methods , is the cost of the asset is not spread over in equal proportions during its useful economic life ? Show Answer

Q93) 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) Show Answer

Q94) 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 Show Answer

Q95) 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 Show Answer

Q96) 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 Show Answer

Q97) 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 Show Answer

Q98) 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 Show Answer

Q99) 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 Show Answer

Q100) 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 Show Answer

Q101) 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 Show Answer

Q102) 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 Show Answer

Q103) 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 Show Answer

Q104) 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 Show Answer

Q105) 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 Show Answer

Q106) 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 Show Answer

Q107) 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 Show Answer

Q108) 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 Show Answer

Q109) Original cost = Rs.1,26,000: Salvage value = 6,000 :Useful life = 6 years. Annual Depreciation under SLM Show Answer

Q110) 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 Show Answer

Q111) 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 Show Answer

Q112) Original cost = Rs.1,00,000: Salvage value = 2,000 :Useful life = 5 years. Rate of Depreciation p.a as per SLM is Show Answer

Q113) 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 Show Answer

Q114) 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 Show Answer

Q115) 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 Show Answer

Q116) 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 Show Answer

Q117) 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 Show Answer

Q118) 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 Show Answer

Q119) 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 = Show Answer

Q120) 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 Show Answer

Q121) 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 1st Oct 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 Show Answer

Q122) B Ltd which depreciates its machinery at 10% p.a. on diminishing balance method had on 1st April 2006 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 1.10.2006 after incurring Rs.10,000 .After providing depreciation ,the closing balance of Machinery account as at 31.3.2007 is Rs.10,64,800 .The original cost of old machines purchased on 1.4.2004 is Show Answer

Q123) 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 Show Answer

Q124) On 1st April 20X6 balance of machinery account. Rs.4,71,200 .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 Show Answer

Q125) 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 Show Answer

Q126) 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 Show Answer

Q127) 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 Show Answer

Q128) 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 = Show Answer

Q129) 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 Show Answer

Q130) 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 Show Answer

Q131) date of purchase of machine 1.04.2004 . 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 Show Answer

Q132) date of purchase of machine 1.04.2004 . 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 Show Answer

Q133) 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 Show Answer

Q134) Date of purchase of machine 1.04.2004 . 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 Show Answer

Q135) 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 Show Answer

Q136) 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 Show Answer

Q137) 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 Show Answer

Q138) 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 to WDV retrospectively ,the rate of depreciation remaining the same. On account of changed method of depreciation Show Answer

Q139) 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 to SLM retrospectively ,the rate of depreciation remaining the same. On account of changed method of depreciation Show Answer

Q140) 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 1.4.01, the rate of depreciation remaining the same .prepare the machinery account for the year 04-05 .On account of changed method of depreciation Show Answer

Q141) 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 Show Answer

Q142) 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 Show Answer

Q143) 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 Show Answer

Q144) 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 Show Answer

Q145) 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 Show Answer

Q146) 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 for 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 Show Answer

Q147) 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 Show Answer

Q148) 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 Show Answer