Answer / pradeep

depreciation mean decrease in the assets value becose of
uses of assets the value of assets has been decrease .it
will charge for knowing the real value of assets at present
for calculate of Income.

Answer / anil kumar t.m

Depreciation is decrease in the value of Assets due to wear
and tear of particular Assets.
Formula = Asset/no of year used*365

Answer / kuldip jagdish vaswani

Depreciation is an Measure of Wearing Out, Consumption and Other Loss in the Value of the Fixed Asset arising from Use Or Passage of the Time. Depreciation is an Nothing but Distribution of Total Depreciable Value of Fixed Assets over useful life of Fixed Assets. ( AS 6 - Depreciation of Indian Accounting Standards)

Depreciable Value of Fixed Assets = Total Cost of Fixed Assets Less Scrap Value

Depreciation is Been Charged for the Following Above Reasons

a) Correct Income Measurement : Depreciation should be charged fro proper estimation of Periodic Profit or Loss
b) True Financial Position : Value of the Fixed Assets should be Adjusted for Depreciation Charged in order to Depict Actual Financial Position
c) In Order to Ascertain Correct Cost of the Production
d) It Provides funds for replacement of fixed asset at the end of its useful life
and Last and Most important
As we are Following Accrual System of Accounting so Matching of Cost and Revenue comes to the picture.
So Cost of Assets matches to the Sales in the year of the Sale.

Answer / shraddha

depreciation means decrease in the value of assets.

the formula of depreciation is=cost-scrap value/no.of years

Answer / dinesh

Depreciation means the life of the asset like
Machine,Vehicle,Computers year by year will decrease teh
capacity level so as per the statuory act the % of the
depreciation will be charged and debit the expenses reduce
the asset value

Answer / gelli

Deprecation means reduced value of asset due to wear and
tear using of no of times.

1. During the current period, ABC Ltd sold 60,000 units of product at Rs. 30 per unit. At the beginning for the period, there were 10,000 units in inventory and ABC Ltd manufactured 50,000 units during the period. The manufacturing costs and selling and administrative expenses were as follows: Total cost Number of units Unit cost Rs. Rs. Beginning inventory: Direct materials 67,000 10,000 6.70 Direct labour 1,55,000 10,000 15.50 Variable factory overhead 18,000 10,000 1.80 Fixed factory overhead 20,000 10,000 2.00 Total 2,60,000 26.00 Current period costs: Direct materials 3,50,000 50,000 7.00 Direct labour 8,10,000 50,000 16.20 Variable factory overhead 90,000 50,000 1.80 Fixed factory overhead 1,00,000 50,000 2.00 Total 13,50,000 27.00 Selling and administrative expenses: Variable 65,000 Fixed 45,000 Total 1,10,000 Instructions: 1. Prepare an income statement based on the variable costing concept. 2. Prepare an income statement based on the absorption costing concept. 3. Give the reason for the difference in the amount of income from operations in 1 and 2.

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