Journal & Ledger for Recording Depreciation

Q.

What is salvage value?

Q.

Closing Stock Is Valued at

1. Cost Price

2. Market Price

3. Net Realisable Value

4. At Cost or Net realisable whichever is Less

Q.

If the capital of a business is Rs. 5, 00, 000 and liablilites are Rs. 1, 00, 000, Loss Rs. 60, 000, Calculate the total assets of the business.

Q.

How to calculate depreciation on fixed assets?

Q.

Which of the following is the normal balance of an accumulated depreciation account?

1. Debit balance

2. Credit balance

3. Nil Balance

4. None of the above

Q.

In the accounting records, the fixed assets are normally recorded at___

1. Book Value

2. Cost

3. Scrap Value

4. Replacement value

Q.

How to calculate depreciation on fixed assets in tally?

Q.

A piece of machinery worth 1, 00, 000 is charged depreciation (Straight line method) at 10%. In the journal entry for transfer of depreciaton to income statement, which account shall be credited ?

1. Depreciation account

2. Machinery account

3. Provision for depreciation account

4. None

Q.

Describe in detail two methods of recording depreciation. Also give the necessary journal entries.

Q.

A company bought machinery for Rs. 50, 000 and the salvage value at the end of 5 years is Rs. 5, 000. The company charges depreciation using SLM method. Which of the following is correct?

1. Depreciation Account Debit 9, 000

2. Machinery Account Debit 10, 000

3. Depreciation Account credit 10, 000

4. Machinery Account Debit 9, 000

Q.

Soloman purchases a machine for Rs. 1, 00, 000 . Its estimated useful life is 5 years and scrap Values Rs. 10, 000. It is decided to write off depreciation under the straight-line method. The correct journal entry to record the same is ___

1. Debit depreciation account Rs 18, 000

2. Credit machinery account Rs 18, 000

3. Both A & B

4. None of these

Q.

Which of the following accounts are temporary accounts

1. Depreciation Account

2. Gain on sale of asset account

3. Loss on sale of asset account

4. All of these

Q.

Discuss in detail the straight-line method and written down value method of depreciation. Distinguish between the two and also give situations where they are useful.

Q.

Amortization of intangible assets and depletion of natural resources is conceptually similar to depreciation of constructed assets. Is the statement correct?

1. Not sure

2. May be its correct

3. Yes, it is correct.

4. No, it is not correct

Q.

When accumulated depreciation is transferred to asset disposal account, Which of the following is correct?

1. Accumulated Depreciation Account Debit

2. Asset Disposal Account Credit

3. Both A & B

4. None of these

Q.

A company bought machinery for Rs. 25000 and depreciation rate is 10% on SLM. Which of the following is correct?

1. Depreciation Account Debit 2500

2. Depreciation Account Debit 25000

3. Depreciation Account credit 1500

4. Machinery Account Debit 1000

Q.

A company bought machinery for Rs. 10000 and depreciation rate is 10%. Which account shall be credited for recording depreciation:

1. Machinery account

2. Provision for depreciation account

3. None

4. Depreciation account

Q.

If a company continues to use equipment past the useful life that was assumed in determining the depreciation, there will be ___ depreciation expense in those additional years.

1. Rs 1

2. Nil

3. Either A or B

4. None

Q.

A piece of machinery worth Rs. 4, 00, 000 is charged depreciation (Straight line method) at 10%.
Which account shall be credited for recording depreciation when accumulated depreciation account is maintained?

1. Depreciation account

2. Machinery account

3. Accumulated depreciation account

4. None

Q.

A company bought machinery for Rs. 50000 and depreciation rate is 18%. Which account shall be credited?

1. Depreciation account by 9000

2. Machinery account by 9000

3. Profit or loss account

4. None of these

Q.

The book value of asset is Rs. 12, 000. The asset is sold for Rs. 15, 000. Which of the following is correct?

1. Profit and Loss Account: Debit 3, 000

2. Cash Account: Debit 12, 000

3. None of these

4. Asset Account: Debit 15, 000

Q. Fill in the blanks with correct alternative and rewrite the statements :

Drawings account appears in ________ column of the trial balance.
a) L.F
b) debit balance
c) credit balance
d) none of these

Q.

The only vehicle owned by a company is reported at its cost of Rs. 50, 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. 25, 000.

Which of the following statements is incorrect regarding when the whole of Rs. 25, 000 need to be transferred away from the Accumulated depreciation account.

1. When the asset is traded in for another

2. When the asset is disposed off

3. When the financial statements are prepared every year

4. When the asset is revalued

Q. A company bought machinery for Rs.25, 000 and depreciation rate is 10% on SLM. In this case, account is debited with an amount of

1. Depreciation
2. Machinery
3. Rs. 2, 500
4. Rs.22, 500

Q.

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

1. Depreciation Account Debit 1000

2. Depreciation Account Debit 10000

3. Depreciation Account credit 1000

4. Machinery Account Debit 1000

Q.

Calculate the total amount to be debited to depreciation account?

$\begin{array}{cccc}\text{Asset}& \text{Cost}& \text{Salvage Value}& \text{Life}\\ \text{Computer}& 1200& 200& 5\\ \text{Monitor}& 300& 0& 5\\ \text{Desk}& 1000& 300& 7\end{array}$

1. Rs 200

2. Rs 260

3. Rs 100

4. Rs 360

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

The Profit on sale of an asset is debited to __________ Account.
a) Profit and Loss
b) Reserve
c) Asset
d) Balance Sheet.

Q.

How Are Intangible Assets Valued?

Q. An analysis of fixed assets account has revealed possibility of unrecorded sale of plant and machinery. Which of the following audit procedures may be adopted to discover it?

1. Examination of property tax files
2. Inquiry of plant manager
3. Examination of debits to accumulated depreciation
4. All of the above

Q.

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