Practice Depreciation under Companies Act, 2013 (India) - 18.10 | 18. Depreciation Accounting | Management 1 (Organizational Behaviour/Finance & Accounting)
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18.10 - Depreciation under Companies Act, 2013 (India)

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is depreciation according to the Companies Act, 2013?

💡 Hint: Think about what happens to the value of an asset over time.

Question 2

Easy

Why is component accounting necessary?

💡 Hint: Consider the different life spans of components in machinery.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the Companies Act, 2013 specify regarding depreciation?

  • a) Specific methods of recording depreciation
  • b) Useful lives of assets
  • c) Different expense classifications

💡 Hint: Refer to Schedule II of the Act.

Question 2

True or False: Companies can adopt different useful lives for their assets under the Companies Act, but must justify their choices.

  • True
  • False

💡 Hint: Think about why flexibility is important in financial reporting.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Imagine a company that owns a factory with various machines, each made of multiple parts. One machine has a motor, conveyor, and body, with differing lifespans. Analyze how the company should account for depreciation under component accounting.

💡 Hint: Consider how the different parts wear out.

Question 2

A company decides to change the useful life of an asset from 10 to 15 years based on new justified calculations. Discuss the impact this might have on their financial reporting.

💡 Hint: How will this change affect the company's cash flows?

Challenge and get performance evaluation