Depreciation, Provisions and Reserves · Class 11 · CBSE · Commerce Accountancy
A machine is purchased for Rs. 1,00,000 on April 1, 2021. The estimated useful life is 10 years, and the estimated scrap value is Rs. 10,000. What wi…
Practice question from Depreciation, Provisions and Reserves (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-B31B72
A machine is purchased for Rs. 1,00,000 on April 1, 2021. The estimated useful life is 10 years, and the estimated scrap value is Rs. 10,000. What will be the annual depreciation under the Straight Line Method?
- A.Rs. 10,000
- B.Rs. 9,000Correct answer
- C.Rs. 11,000
- D.Rs. 8,000
Solution
Annual Depreciation = (Original Cost - Scrap Value) / Estimated Useful Life = (1,00,000 - 10,000) / 10 = Rs. 9,000.
More from Depreciation, Provisions and Reserves
- What is the primary cause of depreciation for a tangible fixed asset according to accounting principles?
- Under the Straight Line Method (SLM) of depreciation, the amount of depreciation charged every year:
- Which of the following methods of depreciation results in a reducing charge of depreciation each year?
- What is the key difference between a Provision and a Reserve?
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