Which of the following statement is FALSE in relation to the term depreciation?
It is an unexpired cost.
The correct answer is option 3. Depreciation is the decline in the book value of fixed assets due to wear and tear over time. It is a non-cash expense but not an unexpired cost. Depreciation is recorded as an expense but does not involve an actual cash outflow. The term "unexpired cost" would typically refer to costs that are still valid and to be amortized or expensed over time, such as prepaid expenses.
Similar Questions
A state of deterioration, damage done to a building or other property during tenancy can be referred to as:
______ system of depreciation is followed in case of those assets which are of small values or where the life of the asset cannot be ascertained with certainty.
If a machine (having a scrap value of Rs.1,000) is purchased for Rs.10,000 and it has an effective life of 10 years of 1000 hours each, what will be the amount of depreciation per hour?
The original cost of an asset is Rs.1,00,000 with an estimated scrap value of Rs.16,000 at the end of its useful life of 5 years. The depreciation on the asset for its whole life is Rs.84,000, what will be the amount to be charged to the Profit & Loss A/c, if the Sinking Fund table shows that Re.0.180975 if invested yearly @5% p.a. produces Re.1 at the end of 5 years?
Identify the correct pair of the causes of depreciation with its types.
A machine is purchased for Rs7,00,000. Expenses incurred on its cartage and installation Rs3,00,000. Calculate the amount of depreciation @ 20% p.a. according to Straight Line Method for the first year ending on 31st March, 2022, if this machine is purchased on 1st July, 2021.
The Sports Club of Orissa had received in 2022-2023, ₹2,000 towards subscription. Subscriptions for 2021-22 unpaid on 1 April 2022 were ₹200. Subscriptions paid in advance on 31 March 2022 were ₹50 and the same on 31 March 2023 were ₹40. Subscriptions for 2022-2023 unpaid on 31 March 2023 were ₹90. How will this be reflected in the books of accounts of a non-profit organisation?
A machine is purchased for ₹7,00,000. Expenses incurred on its cartage and installation ₹3,00,000. Depreciation is charged @ 20% p.a. according to the Straight Line Method for the first year ending on 31 March 2022. Calculate the difference in the amount of depreciation for the 1st year, if this machine was purchased on 1 April 2021 and if the machine was purchased on 1 July 2021.
________ refers to writing off the cost of intangible assets like patents, copyrights, trademarks, franchises, and goodwill which have utility for a specified period of time.
Which of the following statement is FALSE?
Important Questions from Depreciation, Reserve & Provision
For charging depreciation on which of the following assets, the depletion method is adopted?
Which of the following statements is true?
For depreciation on leasehold property, the appropriate method of depreciation is
Which of the following is not an example of Capital Reserve?
Ways of creating secret reserve
1. by supressing the sale
2. by undervaluing stock-intrade and goodwill
3. by charging excessive depreciation
4. by charging capital expenditure to Profit & Loss A/c
