GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Assessment of depreciation and the amount to be charged in respect thereof in an accounting period are usually not based on
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Market value of the asset
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Expected useful life of the depreciable asset
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Estimated residual value of the depreciable asset
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Historical cost or other amount substituted for the historical cost of the depreciable asset when the asset had been revalued
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Explanation:
Detailed explanation-1: -Answer and Explanation: The correct answer a. salvage value.
Detailed explanation-2: -This statement is false. Depreciation is an accounting method of allocating the cost of an intangible asset over its useful life. It is not related to market value. so whatever be the market value of an asset, Depreciation is charged every year.
Detailed explanation-3: -Land is not depreciated, since it has an unlimited useful life. If land has a limited useful life, as is the case with a quarry, then it is acceptable to depreciate it over its useful life.
Detailed explanation-4: -AS-6 deals with depreciation accounting and applies to all depreciable assets, except .
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