Accounting - Study Mode
[#731] The cost of a machine is Rs. 70,000. Its life span is 10 years, after which its expected residual price will be Rs. 5,000. Based on straight line method, the depreciation for first four year will be
Correct Answer
(B) Rs. 26,000
Explanation
Solution: Understanding Depreciation: Depreciation is the decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors. Straight-Line Method: This is a simple way to calculate depreciation. It assumes the asset loses value evenly over its useful life. Calculating Depreciation: First, find the total depreciation amount: Cost of the machine - Residual value In this case, that's Rs. 70,000 - Rs. 5,000 = Rs. 65,000 Next, divide the total depreciation by the asset's lifespan (in years): Total Depreciation / Useful Life So, Rs. 65,000 / 10 years = Rs. 6,500 per year Depreciation for Four Years: Finally, to find the depreciation for the first four years, multiply the annual depreciation by four: Rs. 6,500/year * 4 years = Rs. 26,000 Therefore, the correct answer is Option B: Rs. 26,000
[#732] 'Funds' in the fund flow statements means-
Correct Answer
(D) Working capital
[#733] Interest on capital is added with
Correct Answer
(A) Capital
[#734] X and Y agree to form a partnership. X contributes Rs. 5,000 in assets and devotes one half time to partnership while Y contribution Rs. 20,000 in cash and devotes full time to the firm. How will the partners share the profits of the firm:
Correct Answer
(D) 1 : 1
[#735] Assertion (A): Accounting information refers to only events concerned with a business firm. Reason (R): Accounting information is presented in financial statements.
Correct Answer
(B) Both (A) and (R) are correct