Question
According to which concept, depreciation is to be charged as per one particular method year after year?

Answer

Concept of Consistency.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Similar questions

Prepare Accounting Equation from the following:
  1. Started business with cash ₹ 1,00,000 and Goods ₹
    20,000.
  2. Sold goods worth ₹ 10,000 for cash ₹ 12,000.
  3. Purchased furniture on credit for ₹ 30,000.
Explain the following briefly:
  1. Asset Disposal Account.
  2. Written Down Value Method of providing Depreciation.
Trial Balance is a link between ledger and final accounts.
Explain the following:
Business Entity Concept.
Record the following transaction in the Purchases Book of Modern Furniture House, New Delhi assuming CGST @ 6% and SGST @ 6% and post it into Ledger:
2017
 
Nov. 3
Purchased goods from Sachdeva Furniture Store, New Delhi :
50 Chairs @ ₹ 2,000 each
5 Tables @ ₹ 10,000 each
Nov. 10
Purchased furniture from Mahadeva & Co., Jaipur (Rajasthan) valued ₹ 2,00,000, less $12\frac{1}{2}\%$ Trade Discount
Nov. 18
Purchased furniture from Fashion Furniture House, Chandigarh of the list price of ₹ 2,50,000, less 15%
Nov. 20
Purchased from India Furniture House, New Delhi:
100 Chairs @ ₹ 1,800 each
Nov. 25
Purchased from Mohan Lal & Sons furniture of the value of ₹ 20,000 for cash
Use Accounting Equation to show the effect of the following transactions of M/s Royal Traders:
 
 
(₹)
(a)
Started Business with Cash
1,20,000
(b)
Purchased goods for cash
10,000
(c)
Rent received
5,000
(d)
Salary outstanding
2,000
(e)
Received interest
700
(f)
Sold goods for cash (costing ₹ 5,000)
7,000
(g)
Goods destroyed by fire
500
Show an Accounting Equation on the basis of the following transactions:
S.no  
(i) Sunil started business with cash 1,50,000
(ii) Opened a Bank Account by depositing ₹ 25,000 out of cash  
(iii) He sold his personal car for ₹ 50,000 and deposited the amount in the firm's Bank Account  
(iv) He purchased a building and furniture for 1,00,000
(v) He purchased goods from Ram on credit 50,000
(vi) He paid cartage 500
(vii) He sold to Shyam on credit goods costing ₹ 6,000 for 9,000
(viii) Received rent from tenants 1,000
(ix) Received security deposit from tenants 1,500
(x) Purchased stationery for cash 100
(xi) Invested in shares (personal) 50,000
(xii) Received interest in cash 200
(xiii) Introduced fresh capital 25,000
(xiv) Goods destroyed by fire 500
Journalise the following transactions of Raj Kumar Traders, timber merchants:
  1. Purchased timber from Kuldeep Kumar, for cash ₹ 2,000 and credit ₹ 10,000.
  2. Paid to Kuldeep Kumar in full settlement of his account ₹ 9,950.
  3. Paid rent in advance ₹ 10,000.
  4. Purchased machinery for ₹ 1,00,000 by cheque and carriage ₹ 2,000 and installation charges ₹ 1,000 paid in Cash.
  5. Purchased goods for ₹ 50,000 from Govind and sold it to Manohar for ₹ 65,000.
State two demerits of Reducing Instalment Method of providing depreciation.
Do you think that the Convention of conservatism results in creation of secret reserves?