Accumulated Depreciation

Q.

Riya sold her car for Rs. $50,000$less than what she bought for and lost $8\%.$ At what price should she have sold the car, if she wanted to gain as much as she lost in the first transaction?

1. Rs. $6,25,000$

2. Rs$.6,50,000$

3. Rs.$6,75,000$

4. Rs.$6,37,000$

5. Rs. $7,00,000$

Q.

How trial balance shows the accumulated depreciation?

1. a debit item

2. it does not show

3. a credit item

4. None

Q.

A company bought machinery for Rs. 10000 and depreciation rate is 10%. Provision for depreciation account is maintained. Which of the following is correct?

1. Depreciation Account Debit 100

2. Depreciation Account Debit 10000

3. Profit & loss Account Debit 10000

4. Provision for Depreciation Account credit 1000

Q.

An alternative term used for accumulated depreciation expenses?

1. Targeted depreciation

2. Provision for depreciation

3. Depletion

4. Cumulative depreciation

Q.

A fixed asset was bought for Rs. 5, 000. Its accumulated depreciation is Rs. 3, 000 and rate of depreciation is 20%. Calculate its depreciation expenses for the current accounting period using reducing balance method?

1. Rs. 600

2. Rs. 2, 000

3. Rs. 300

4. Rs. 400

Q.

Which of the following describes the balance in the Accumulated depreciation account?

1. The cumulative sum of all depreciation expenses from the date of asset's acquisition to the present date.

2. Depreciation expense written off in an accounting period

3. Asset account

4. None of the above

Q.

What do you understand when one refers to as "net book value" of a non current asset?

1. The cost of the asset less amount expensed as depreciation in the current period

2. The current worth of the asset

3. The cost of the asset

4. The cost less accumulated depreciation up to the date of reporting

Q.

The Machinery account shows a debit balance of Rs 30, 000 on 1st April 2010 in the books of Ramesh Traders. The Machinery was original purchased on 1st Apil 2010 a new Machinery was purchased for Rs 45, 000 On 1st July 2010 additional Machinery was purchased for Rs 16, 000

Q.

A company sells an old delivery van for Rs8, 000 at the end of the year. The company uses the straight-line depreciation method. The delivery van cost Rs30, 000. The accumulated depreciation is Rs20, 000. Which of the following is correct

1. Profit of Rs 2000

2. Loss of Rs 8000

3. Profit of Rs 8000

4. Loss of Rs 2000

Q.

What will be the book value of the asset as at the end of accounting period?

1. The cost of the asset add amount expensed as depreciation in the current period

2. The current worth of the asset

3. The cost of the asset

4. The cost less accumulated depreciation up to end of accounting period

Q. At the beginning of the year, the value of loose tools was Rs. 20, 000 and during the year Rs. 10, 000 worth of tools were purchased and Rs. 2, 000 realised by way of sale of scrapped loose tools. At the end of the year, the loose tools considered to be only Rs. 12, 000. The amount to be charged to Profit & Loss Account is:

1. Rs. 30, 000
2. Rs. 28, 000
3. Rs. 16, 000
4. None of these

Q.

The only vehicle owned by a company is reported at its cost of Rs. 60, 000 in the Motor Vehicle account, while the depreciation on the vehicle written off in each of the three years of use is reported in an Accumulated depreciation account at Rs. 36, 000.
Which of the following statements is incorrect regarding when the whole of Rs. 36, 000 need to be transferred away from the Accumulated depreciation account.

1. When the asset is revalued

2. When the asset is traded in for another

3. When the asset is disposed of

4. When the financial statements are prepared every year

Q. On using reducing balance method on an asset of Rs. 20, 000 at the rate of 10% per annum, depreciation of 3rd year will be:

1. Rs. 6, 000
2. Rs. 1, 620
3. Rs. 2, 000
4. Rs. 1, 800

Q. Loss on disposal of assets is credited to _____________.

1. Assets a/c
2. Depreciation a/c
3. Profit and loss a/c
4. Loss on sale of assets a/c