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#### Depreciation Accounting Book Back Questions

11th Standard

Reg.No. :
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Accountancy

Time : 00:45:00 Hrs
Total Marks : 30
5 x 1 = 5
1. Under straight line method, the amount of depreciation is

(a)

Increasing every year

(b)

Decreasing every year

(c)

Constant for all the years

(d)

Fluctuating every year

2. Under the written down value method of depreciation, the amount of depreciation is

(a)

Uniform in all the years

(b)

Decreasing every year

(c)

Increasing every year

(d)

None of the above

3. For which of the following assets, the depletion method is adopted for writing off cost of the asset?

(a)

Plant and machinery

(b)

Mines and quarries

(c)

Buildings

(d)

Trademark

4. Which method shall be efficient, if repairs and maintenance cost of an asset increases as it grows older

(a)

Straight line method

(b)

Reducing balance method

(c)

Sinking fund method

(d)

Annuity method

5. Depreciation is to be calculated from the date when

(a)

Asset is put to use

(b)

Purchase order is made

(c)

Asset is received at business premises

(d)

Invoice of assets is received

6. 3 x 2 = 6
7. A company purchased a building for Rs 50,000. The useful life of the building is 10 years and the residual value is Rs 2,000. Find out the amount and rate of depreciation under straight line method.

8. A firm acquired a machine on 1st April 2015 at a cost of Rs 50,000. Its life is 6 years. The firm writes off depreciation @ 30% p.a. on the diminishing balance method. The firm closes its books on 31st December every year. Show the machinery account and depreciation account for three years starting from 1st April 2015.

9. Find out the rate of depreciation under straight line method from the following details:
Original cost of the asset = Rs.10,000
Estimated life of the asset = 10 years
Estimated scrap value at the end = Rs.2,000

10. 3 x 3 = 9
11. Calculate the rate of depreciation under straight line method.
Purchase price of a machine Rs 80,000
Expenses to be capitalised Rs 20,000
Estimated residual value Rs 4,000
Expected useful life 4 years

12. A firm purchased a plant on 1.1.2018 for Rs.9,000 and spent Rs.1,000 as erection charges. Calculate the amount of depreciation for the year 2018 @ 15% per annum under the written down value method. Accounts are closed on 31st March every year.

13. On 1st April 2015, Kumar purchased a machine for Rs.80,000 and spent Rs.20,000 on its installation. The residual value at the end of its expected useful life of 8 years is estimated at Rs.4,000. On 30th September 2017, the machine is sold for Rs.50,000. Depreciation is to be provided according to straight line method. Prepare Machinery Account. Accounts are closed on 31st December every year.

14. 2 x 5 = 10
15. On 1st April 2008, Sudha and Company purchased machinery for Rs 64,000. To instal the machinery expenses incurred was Rs 28,000. Depreciate machinery 10% p.a. under straight line method. On 30th June, 2010 the worn out machinery was sold for Rs 52,000. The books are closed on 31st December every year. Show machinery account.

16. Anand bought a machinery for Rs.1,00,000 on 1-1-2015. On 1-6-2016, he bought another machine for Rs.50,000. On 1-10-2017, he purchased another machine for Rs.20,000. Provide depreciation at 10% p.a. on straight line method. Prepare machinery account for the years 2015 to 2017 by using accounts by assuming accounts are closed on 31st December every year.