Answers and Solutions

Answer

DEPRECIATION IS THE REDUCTION IN THE VALUE OF ASSETS.THERE ARE SOME TYPES OF DEPRECIATION SUCH AS, STRAIGHTLINE/FIXED INSTALMENT METHOD/ORIGINAL VALUE METHOD, REDUCING /WRITTEN DOWN VALUE METHOD,INSURANCE POLICY METHOD,ANNUITY METHOD ETC.ETC. 

Answer

Defination of Depreciation: "Reducing the Asste value indirectly in the form of cash".

(Asste value will be reduced but the reduced value will be in invisible form. That is the resoan why we do not mention any CASH in depreciation entries).

Jounal Entry of Depreciation:

Depreciation of Asset     A/c....... Dr     xxxx

          To Asset       A/c           xxxx

Depreciation is calculated only on fixed assets expect Land & Buildings

Types of Depreciations:

• Straight Line Depreciation Method
• Diminishing Balance Method
• Sum of Years’ Digits Method
• Double Declining Balance Method
• Sinking Fund Method
• Annuity Method
• Insurance Policy Method
• Discounted Cash Flow Method
• Use Based Method
  • Output Method
  • Working Hours Method
  • Mileage Method
• Other Methods
  • Depletion Method
  • Revaluation Method
  • Group or Composite Method

Answer

Answer

Depreciation is decrease in the value of an asset over its life on a certain basis

Tpes of it are as follows:

• Straight line method 
• written down value
• number of production hours

Answer

In accounting terms, depreciation is defined as the reduction of recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. 

Types:

Straight Line method

WDV- Written Down Value or reducing balance method

Answer

Answer

Depreciation is the decrease in value of an asset due to its repeatative use.

Answer

Depreciation is the the wear and tear in value of the assets due to span of time and its use. If we only consider span of time depreciation will not take place because some use of that asset must take place, so both factors are important.

There are two methods fixed installment method (straight line method) and Diminishing value method

Answer

deprication is means decline in the value of asset. there are  fixed instalemnt method and diminishing value method.

Answer

Depreciation is the decrease in value of an asset due to its repeatative use.

Answer

Depreciation is a systematic  process of distributing the cost of (tangible) assets over the life of assets. Depreciation is a process of allocation. Cost to be allocated = acquisition cot - salvage value Allocated over the estimated useful life of assets.

Depreciation methods which are very popular are-

• Straight line method-  Depreciation = (Cost - Residual value) / Useful life
• Diminishing balance method - Book value x Depreciation rate        Book value = Cost - Accumulated depreciation        

Answer

Depreciation means decrease in the value of Assets. There are various reasons for depreciation such as wear and tear, Outdated technology and so on. Accounting of Depreciation is governed by Accounting Standard- 6 as Issue by ICAI.

Following are methods to calculate depreciation:

1.Straight line Method (SLM)

2. Written down value Method (WDV)

3. Annuity Method and so on

Answer

Answer

depreciation is the reduction in amount of loss due to many causes like physical wear and tear, effluxion of time, obsolosence, depletion, physical detoriaration resulting from atmospheric exposure.The different types of depreciation are:

1.straight line method

2.written down value method

3.annuity method

4.production units method

5.sum of years method

6.depletion method

7.sinkking fund method

8.machine hour rate method

9.group depreciation method

10.double decline method

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depreciation is reduction in amount of depreciable asset due to normal wear and tear ,effluxtion of time,technological obsolecence and due to several market changes it is just like chanrging cost of product to p&l  the difference lies in treatment  depreciation is charged over its useful life in p&l as it is strictly based on matching principle types of depreciation (main) 1-straight line method 2-written down value method etc.

Answer

Hello Navaljot

The reduction in value of a tangible fixed asset due to normal usage, wear and tear, new technology or unfavorable market conditions is called DEPRICIATION. Assets, such as plants and machinery, buildings, vehicles, etc., which are expected to last more than one year, but not for infinity, are subject to this reduction. It is allocation of the cost of a fixed asset in each accounting period during its expected time of use.

Types of Depreciation

• Straight Line Method- An equal amount is allocated for each accounting period.
• Diminishing Value Method- depreciation is charged on reducing balance on a fixed rate.
• Annuity method
• Machine hour rate method
• Revaluation method
• Sum-of-the-years’ digit method