When a fixed asset is sold, it should be recorded in:
Sales account
Purchase account
Disposal of fixed asset
Equity
Cost of fixed asset spread over year is known as:
Depreciation
Matching
Disposal
Expenses
How will depreciation affect the net profit?
Increases
Decreases
Remain same
Not affected
If the accounting records continue to show the asset in cost price, this is:
Correct as per accounting standards
Easy to compute
Mislead the accounting information
Help to calculate in exact manner
If a lease has a fixed life of a set number of years, this is due to:
Physical deterioration
Passage of time
Economic reason
Loss
The assets are valued at the end of each financial year. This is:
Revaluation method
Diminishing method
Written off method
Straight line method
In balance sheet, fixed assets are recorded at a figure less than the cost price. This is known as:
Written down value
Cost price
Income price
Diminishing balance method of depreciation is calculated with:
Full cost of the asset
Cost of the asset at that year
Cost of the asset
Net value of the asset
The difference between balance of asset and provision for depreciation of asset account will show:
Net book value
Residual
Depreciation does not involve out flow of money because:
It is a non-monetary expense
It is an income
It is a capital expenditure
It is prudence
