Difference between SLM & WDV

Q.

Under diminishing balance method, depreciation___

1. Increases every year

2. Remains constant

3. None of the above

4. Decreases every year

Q.

Which is the best method of depreciation?

Q.

Distinguish between the straight-line method and written down value method of calculating depreciation.

Q.

In which of the following methods of charging depreciation, it is charged on Written down value of the asset?

1. Straight line method

2. Reducing balance method

3. Annuity method

4. Sum of the digits method

Q.

___is a method of depreciation, in which the cost of the asset is spread uniformly over the life years by writing off a fixed amount every year, where as in ___ method of depreciation, a fixed rate of depreciation is charged on the book value of the asset over its useful life.

1. WDV & SLM

2. SLM & SLM

3. SLM & WDV

4. WDV & WDV

Q.

Niranjan & Co has been charging depreciation @ 20% per annum on Straight Line Method. It now wants to change the method to diminishing balance method, the rate of depreciation being 35% per annum. Can the company do so?

Or
As per consistency concept, a company cannot change an accounting policy. Does this hold true in all instances? Explain.

Q.

What are the four depreciation methods?

Q.

The annual depreciation charged under _______ method remains fixed during the life of asset, while it diminishes every year in ______ method

1. WDV & WDV

2. WDV & SLM

3. SLM & WDV

4. SLM & SLM

Q.

In ………………. Method, the value of the asset is not completely written off?

1. Straight line method

2. Reducing balance method

3. Machine hours method

4. Number of units produced method

Q.

Under this method, a particular asset is expected to generate equal utility (economic benefits) during its useful life. Which method is this?

1. Straight line method

2. Number of units produced method

3. Reducing balance method

4. Machine hours method

Q.

In which of the following methods of charging depreciation, it is charged on Orginal cost of the asset?

1. Straight line method

2. Diminishing balance method

3. Annuity method

4. Sum of the digits method

Q.

In which method, the depreciation is constant and in which method, the depreciation is higher in initial years when compared to later years?

1. SLM & SLM

2. SLM & WDV

3. WDV & SLM

4. WDV & WDV

Q. Under which of following method depreciation is charged uniformly?
1. Straight line method (SLM).
2. Sum of year digit method.
3. Annuity method.
4. Depreciation fund method.
The correct answer is -

1. 3 and 1.
2. 4 and 1.
3. 3, 2 and 1.
4. Only 1

Q.

In which method, depreciation is constant every year and in which method it is higher in the beginning years when compared to later years.

1. SLM & WDV

2. WDV & SLM

3. WDV & WDV

4. SLM & SLM

Q. Is reducing balance method and declining balance method same

Q. Rs.10, 000 paid in cash for repairs of newly purchased old machine were debited to repairs Amount. Pass the rectification entry :

1. Cash Account to be debited and repairs accounted to be credited
2. Machine Account to be debited and repairs accounts to be credited
3. Suspense Account debited and repairs account to be credited
4. Machine Account to be debited and cash account to be credited

Q.

The annual depreciation charge in ________ remains fixed during the life of the asset. In contrast, the amount of depreciation in ______ method diminishes every year.

1. WDV & SLM

2. SLM & WDV

3. WDV & WDV

4. SLM & SLM

Q.

Under which method, the depreciation in later years will be less than the earlier years?

1. Written Down Value Method

2. All the above

3. Diminishing Balancing Method

4. Reducing Balancing Method

Q. Rs.10, 000 Paid in cash for installation of a new machine were debited to Installation Expenses Account While Passing a rectifying entry :

1. Suspense A/c to be debited and Installation A/c to be credited
2. Cash A/c to be debited and Installation Expenses A/c to be credited
3. Machine A/c to be debited and Cash A/c to be credited
4. Machine A/c to be debited and Installation A/c to credited

Q.

Write the word/term/pharse which can substitute each of the following statement :

The method of depreciation under which depreciation is calculated on original cost of asset.

Q. Which of the following are applicable to sinking fund method of depreciation?
I. Periodic depreciation is smaller than the assets, actual annual depreciation cost.
II. Amount of interest constantly declines due to assets, reducing balances.
III. Annual net incidence on profit and loss account remains constant due to incorporation of only fixed depreciation.
IV. Periodic depreciation is recorded through the assets account.
Select the correct answer using the codes given:

1. II and IV
2. I and III
3. I, II and III
4. II, III and IV

Q.

If a firm is using ______ method, the amount of depreciation is constant while if the method of depreciation is _____, the amount of depreciation is initially higher.

1. SLM & WDV

2. WDV & SLM

3. SLM & SLM

4. WDV & WDV

Q.

Which of the following method is to be used, when the repair cost for assets are high in later period?

1. None of these

2. Straight Line Method

3. Written Down Value Method

4. Number of Production Units Method

Q.

What is the simplest depreciation method?

Q. Carriage outwards appearing in the Trial Balance are shown:

1. On the debit side of Profit & Loss Account
2. On the debit side of Trading Account
3. On the liabilities side of the Balance Sheet.
4. None of these

Q. Select the most appropriate answers from the alternatives given below and rewrite the sentence.

In Straight Line Method of depreciation the amount of depreciation remain ________ every year.
a) constant
b) increased
c) fluctuating
d) decreased

Q. When depreciation fund account closes it transfers its balance to ________.

1. new asset account
2. old
3. none of the above
4. sinking fund

Q. Under _____ method depreciation is calculated on the basis of hours worked during the year by the machine.

1. Inventory system of depreciation
2. Machine hour rate method
3. Sum of years digit method
4. Depletion Method

Q. Write the word/term/pharse which can substitute each of the following statement :

The method of depreciation under which depreciation is calculated on balance amount

Q. Under which of the following method of depreciation is not charged uniformly?

1. Fixed instalment method
2. Sum of year digit method
3. Depreciation fund method
4. All of the above