Journal & Ledger for Recording Depreciation

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. 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.

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.

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.

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.

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.

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.

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.

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.

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