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Unit 11: Depreciation Accounting

7. State the difference between the straight line method and written down value method with Notes
suitable examples.
8. What are the key reasons for charging depreciation?
9. Construct the key depreciation entries for charging and recording depreciation.
10. Golden Transport Company, New Delhi purchased 3 Trucks at ` 4,00,000 each on 1st Jan
2003 from the dealer. The company decided to charge 20% deprecation on the basis of
original cost of trucks.

Prepare Trucks A/c for 3 years and find out its w.d.v. at the end of 3rd year.
Answers: Self Assessment

1. concept of income 2. fi xed assets
3. cost price 4. Depreciation funds
5. straight line method 6. purchase value

7. financial position 8. central Government
9. False 10. True
11. True 12. False
13. False 14. False
15. True

11.10 Further Readings

Books Khan and Jain, “Management Accounting”.
M.P. Pandikumar, “Accounting & Finance for Managers”, Excel Books, New Delhi.
R. L. Gupta and Radhaswamy, “Advanced Accountancy”.

S. N. Maheswari, “Management Accounting”.
V. K. Goyal, “Financial Accounting”, Excel Books, New Delhi.

Online links http://www.globusz.com/
www.futureaccountant.com

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