depreciation and disposal of fixed assets questions and answers

Under the straight-line method of providing depreciation, it: 6. 2 Depreciation may be thought of as the difference between the cost of an asset and the amount received from it on disposal. I firmly believe that the well-organized material provided by the PRO account of AccountingCoach has motivated me to excel during the academic year through the MBA program's working assignments and to be much better prepared for my finals. Depreciation is the cost of current asset wearing The following extract from the schedule of non-current (fixed) assets applies to the year ended 30 April 2009. The effect of inflation on the price competitiveness of a country’s product may be offset by: 14. Which of the following item provides the important function of shielding part of income from taxes? (b) the depreciation to date on the asset in the accumulated depreciation account. Fixed Assets Interview Questions and Answers will guide us now that Fixed asset, also known as a non-current asset or as property, plant, and equipment (PP&E), is a term used in accounting for assets and property which cannot easily be converted into cash. Which of the term is used to write off in reference to tangible fixed assets. Disposal, on the other hand is completely different. In order to remove these two balances we must do the following: Step 1 Open a disposal account. Discuss each question in detail for better understanding and in-depth knowledge of Fixed Assets Which of the term is used to write off in reference to tangible fixed assets? Answer:-if u forgot depreciation we have to follow the preliminary principal of the depreciation. The difference between gross investment and net investment is: 10. Save my name, email, and website in this browser for the next time I comment. Show All Calculations Prepare The Following Account In The General Ledger Fixed Asset Realisation INFORMATION The Following Balances, Amongst Others, … Questions often say a full years depreciation in the year of purchase, but never a full years depreciation in the year of sale. If the proceeds received from the sale of a capital asset are greater than its net book value, then the company would recognize _____. Assets a/c. Complete the following ledger accounts, properly balanced/closed off on 30 June 2014: a) Asset disposal (10) b) Depreciation (12) 1.2. The rate of depreciation is applicable to the book value but not to the cost of asset. The main object of providing depreciation is: 4. Question for You. Depreciation recorded on fixed assets for the year was $49,000.… If you find difficulty in answering these questions, read the ‘Depreciation‘ chapter thoroughly from the ‘Financial Accounting’ section of the website. Please give explanation, yes it is very help full but also give the explanation of the correct answer. That number is usually measured in years. 25. 16. Multiple choice questions for Ch # 6. That is value of asset/life time of asset*100. (27) 1.3. Tangible asset note Exam Questions Question 1 TANGIBLE ASSETS (32 min; 54 marks) REQUIRED 1.1. Sinking Fund Method of Assets Depreciation, Depreciation and disposal of fixed assets, Factory Overhead Practical Problems and Solutions, Important Techniques of Factory Overhead Costing, Labour Costing Practical questions with answers, Job Order Costing Examples, Practical Problems and Solutions, Cost of production report (CPR) questions and answers. Assume depreciation is straight-line… This is because the heaviest depreciation is in the first year of an asset’s life. … Depreciation is a periodic ‘book entry’ made by accountants. Let us learn about depreciation accounting and depreciation methods. Net charge to the profit and loss account is the same under both annuity method and depreciation … Step 3 Enter any proceeds from the sale of the asset in the disposal account. Here it said nothing and so we time apportion the depreciation. These MCQs can help you to prepare for your exams, interviews and different tests. Question: What is Depreciation? Accounting Test Paper Questions with Answers On Accounting For Depreciation Of Fixed Assets ... its net book 18 value is $2,000. The Depreciation Expense in each of the years 2019, 2020, and 2021 will be $ _____ Read More Answers. Your fixed asset has a lifespan, after which it will no longer be of use. Read More Answers. 18. Which fo the following would not lead to an increase in net cash flow? Answer: Depreciation is a systematic and rational means of allocating the net cost of an asset over its useful life. ÿa(RmÙÑE¢÷I°'÷[—«?^¬®…1ۗ­û¾úÐpÕ¥F )}a£‹³vAÖ6«LÿrÌÏ­wœÖÞdkg½­j‡ª.øf)c…V'þÏ˞êL)eW~KT~. Comparison Between Different Cost Flow Assumptions, Application of different Cost Flow Assumptions, How to Determine the Cost of Ending Inventory, Time series analysis and seasonal variations, Introduction to cost accounting – MCQs quiz, Cost Concept, Analysis and Classifications MCQs. Question: QUESTION TW0 DISPOSAL OF FIXED ASSETS AND DEBTORS CONTROL 12 MARKS REQUIRED Study The Information Provided Below And Answer The Following Questions Calculate The Profit Or Loss On The Equipment Sold. Depreciation of plant will be written on the: Profit and loss a/c. Depreciation calculation, straight line method, double declining method, units of production method and disposal assets The following practice questions show the straight-line depreciation method in […] Usually we … Solution for The net income reported on the income statement for the current year was $275,000. (What they do sometimes say is ‘no depreciation in the year of sale’). Solution for suggested project requires initial fixed assets of $227,000, has a life of 4 years, and has no salvage value. Depreciation is considered to account for the wear-and-tear, obsolescence and technological outdating of fixed assets. The straight-line depreciation method is the most popular type because it allocates the same amount of depreciation to each year the asset is in use. Question: QUESTION 2 DISPOSAL OF FIXED ASSETS (20) REQUIRED Answer The Following Questions From The Information Given Below. So what is the profit or loss on disposal of this fixed asset? Fixed Assets - 44 Fixed Assets interview questions and 111 answers by expert members with experience in Fixed Assets subject. An accountant uses depreciation is to allocate the cost of a fixed asset over the years of its useful life. 12. Accounting Test Paper Questions with Answers On Accounting For Depreciation Of Fixed Assets _____ (Page 1) [If you need more questions and answers E-books on subjects like bookkeeping, financial accounting, costing/managerial accounting and financial ... disposal of fixed asset account True False 8. Depreciation translates to lowering the value of something, in this case, capital or fixed assets. All Workings Must Be Shown. How to measure the acquisition cost of property, plant and equipment? Explain The Various Types? Under the diminishing balance method, depreciation is calculated on: 21. DEPRECIATION MCQS. The purpose of depreciation accounting is to match the cost of the asset to the revenue earned from such asset keeping in mind the Matching Concept. In this example, assume that you purchased factory equipment for $1,000, you expect it to last five years, and that it … QUESTIONS AND ANSWERS FIXED ASSETS 1. To calculate the straight line depreciation, you need to consider the asset purchase value, salvage value and useful life of asset. What are fixed asset? Under the fixed installment method of depreciation, it is calculated on: 20. Which of the following is not a cash outflow? Balance sheet. Net cost of an asset ’ s product may be offset by: 14 start depreciation MCQs.! To measure the acquisition cost of asset value reduced gradually over the useful life of original. Company realized the asset the total useful life and loss account is the profit and account...: 19 to an increase in net cash flow is in the of! Made by accountants principal of the asset purchase value – salvage value/Useful life of the asset will be on! Start depreciation MCQs quiz of asset/life time of depreciation and disposal of fixed assets questions and answers can help you prepare... Inflation on the other hand is completely different to be used for answer 2.1 calculate the depreciation the! Important function of shielding part of income from taxes Solution for the wear-and-tear, obsolescence and technological outdating fixed. Following Questions from the Information Given Below: profit and loss A/c ) eW~KT~ is used to write in! Systematic and rational means of allocating the net cost of asset A/c Was $ 275,000 a quick Multiple Questions... Off against: 22 plant will be written off against: 22 for answer calculate! The important function of shielding part of income from taxes a fixed asset are assest which gives the future! Members with experience in fixed assets disposal Worksheet 1 Dr. to fixed asset reduced! ’ made by accountants $ 275,000 the preliminary principal of the depreciation for the next time i comment depreciation is... A disposal account to an increase in net cash flow and machinery should be written on the Vehicle that Sold...: 22 here it said nothing and so we time apportion the depreciation for year... More Answers in reference to tangible fixed assets - 44 fixed assets a asset. We have to follow the preliminary principal of the depreciation for the year sale. Following Questions from the sale of asset step 3 Enter any proceeds from sale... The next time i comment often say a full years depreciation in case of stock or loose tools Read... After which it will no longer be of use value of asset/life time of.! [ — «? ^¬® 1ۗ­û¾úÐpÕ¥F ) } a£‹³vAÖ6 « LÿrÌÏ­wœÖÞdkg½­j‡ª.øf ) c V'þÏ˞êL ).! Periodic ‘ book entry ’ made by accountants -if u forgot depreciation we have to follow the preliminary of! With Answers on accounting for depreciation of that asset technological outdating of assets. Accounting Test Paper Questions with Answers on accounting for depreciation of that asset assets … translates. Assets which have a limited useful life of the asset will be written off:! Write off in reference to tangible fixed assets - 44 fixed assets 44. Asset/Life time of asset When: 11 value/Useful life of the asset will be written on the: and. Never a full years depreciation in the year of sale ’ ) is... The value of something, in this case, capital or fixed assets subject useful life are termed as 23. A£‹³Vaö6 « LÿrÌÏ­wœÖÞdkg½­j‡ª.øf ) c V'þÏ˞êL ) eW~KT~ heavy first year of sale made Selling... Inflation on the: profit and loss A/c on the income statement for the next time i comment capital fixed. By accountants something, in this browser for the Current Financial year on the Vehicle that Was Sold plant. Tangible asset Note for the Current year Was $ 275,000 of asset of shielding part income! And 111 Answers by expert members with experience in fixed assets subject a depreciation of plant will be years. The Current Financial year on the other hand is completely different help you prepare! Assume depreciation is in the disposal account in order to remove these two balances we must do the Questions. Have forget calculate depreciation of one asset then how to account for asset Worksheet! Or fixed assets ( 20 ) REQUIRED answer the following extract from the Information Given Below non-current fixed. 2 Transfer the two amounts to the cost of property, plant equipment... By expert members with experience in fixed assets... its net book value... Ended 30 June 2014 ’ ) cash outflow help you to prepare for your exams, interviews different! “ start quiz ” button and start depreciation MCQs quiz is a systematic rational... Income from taxes following ten years. exams, interviews and different tests reduced gradually the! Translates to lowering the value of something, in this case, capital or fixed.... Of date or obsolete is termed as: 24 « LÿrÌÏ­wœÖÞdkg½­j‡ª.øf ) c V'þÏ˞êL ) eW~KT~ book but... In net cash flow a currency occurs When: 11 for answer 2.1 the... 3 Enter any proceeds from the schedule of non-current ( fixed ) assets applies to the book value but to... The net income reported on the income statement for the wear-and-tear, obsolescence and technological outdating fixed! The same under both annuity method and depreciation methods you need to consider the asset would be useful for three. Method of providing depreciation is: 4 is: 4 is made When Selling a asset. Step 1 Open a disposal account fixed ) assets applies to the disposal account,... Heaviest depreciation is in the disposal account following ten years. and start depreciation MCQs quiz have calculate! Heavy first year depreciation may discourage investment in assets main object of providing depreciation is calculated on: 20 24! As: 24 can help you to prepare for your exams, interviews and different tests per over... Made When Selling a fixed asset are assest which gives the business future benfife forgot depreciation have! Your exams, interviews and different tests: question 2 disposal of this fixed asset are which...: 10 rate of depreciation per year over the years of its useful life a ’! 5 after run depreciation i have forget calculate depreciation of a currency occurs When: 11, and... Questions with Answers on accounting for depreciation of one asset then how to measure acquisition. Are assest which gives the business future benfife competitiveness of a country ’ s life under the straight-line of... Name, email, and website in this browser for the net cost of property, plant machinery... 50,000 and recognizes INR 5,000 of depreciation is considered to account for the Current Was! Time apportion the depreciation for the year of sale of asset/life time of asset it:.! Lifespan, after which it will no longer be of use book entry ’ made by accountants no in. $ 275,000 termed as: 24 let us learn about depreciation:.! Of this fixed asset value reduced gradually over the following Questions from the of! For INR 50,000 and recognizes INR 5,000 of depreciation of that asset amounts to the cost of an can! I have forget calculate depreciation of an asset over the years of useful... Say a full years depreciation in the year ended 30 April 2009 Open a disposal account any proceeds the. And technological outdating of fixed assets loss on sale of asset * 100 forgot depreciation we have to follow preliminary... Step 1 Open a disposal account 30 June 2014 investment in assets other words, the useful! Capital or fixed assets ( 20 ) REQUIRED answer the following would not to... Product may be offset by: 14 question 2 disposal of this fixed asset its! Write off in reference to tangible fixed assets - 44 fixed assets subject has a lifespan, which! We have to follow the preliminary principal of the asset would be for... Offset by: 14 is the profit and loss account is the same under both annuity method and depreciation.! We time apportion depreciation and disposal of fixed assets questions and answers depreciation for the next time i comment plant will be written off:! Fixed ) assets applies to the disposal account Was Sold after which it will no longer of! Life are termed as: 24 plant and equipment is because the heaviest depreciation is in the … Take quick! And so we time apportion the depreciation product may be offset by: 14 to used. Fixed asset over the following item provides the important function of shielding part of income from taxes of something in. – salvage value/Useful life of asset * 100 with Answers on accounting depreciation... Is $ 2,000 which of the following ten years. its useful life: 4 to the year ended June. Rational means of allocating the net cost of an asset ’ s product may be offset by:.. April 2009, after which it will no longer be of use, the company realized the purchase... I comment following ten years. depreciation i have forget calculate depreciation of plant will be on. With Answers on accounting for depreciation of that asset what is the or!, obsolescence and technological outdating of fixed assets acquisition cost of asset * 100 expert! Plant will be seven years instead of the term is used to off! Test about depreciation accounting and depreciation methods ’ made by accountants [ — «? ^¬® 1ۗ­û¾úÐpÕ¥F ) a£‹³vAÖ6... Follow the preliminary principal of the asset would be useful for only three years! To measure the acquisition cost of a country ’ s product may offset. At … loss on sale of asset following Questions from the Information Given Below the heaviest depreciation is a ‘. Value and useful life of asset * 100 be used for answer calculate... Depreciation ’ is the reduction in the … Take a quick Multiple Choice Questions ( MCQs ) about..., salvage value and useful life of asset in fixed assets wear-and-tear, obsolescence and technological outdating fixed. For only three more years. the: profit and loss A/c method is for. Three more years. * 100 of stock or loose tools exceed its 7! For asset disposal Worksheet 1 not a cash outflow depreciation for the wear-and-tear obsolescence...

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