Advertisements
Advertisements
Question
What is meant by depreciation?
Solution
- The process of allocation of the relevant cost of a fixed asset over its useful life is known as depreciation.
- It is an allocation of cost against the benefit derived from a fixed asset during an accounting period.
APPEARS IN
RELATED QUESTIONS
Write the word/term/phrase which can substitute the following statement:
A continuous, gradual and permanent reduction in the value of a fixed asset.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
Decrease in the value of fixed assets is known as ______
Do you agree or disagree with the following statement:
Depreciation is non-cash expense.
Complete the following sentence:
Gradual and permanent decrease in the value of asset is known as ____________
Complete the following sentence:
Depreciation is derived from a Latin word ______.
What is the consumption of fixed capital called?
Correct the following statement and rewrite the statement.
Depreciation provided on assets is debited to an asset accounts
Correct the following statement and rewrite the statement.
Profit on sale of the asset is credited to an asset account.
Distinguish between depreciation and capital loss.
On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
