Fixed Assets Interview Questions

Direct taxes are nothing but , collecting tax by govt directly from the specified assesses, example is Income tax , wealth tax. Where as indirect taxes are collecting indirectly from consumers say u ...

Appreciation means increasing value of an asset.

Example:Land....

As per Accounting standard 16 specified by ICAI , Borrowing cost, Interest cost even though non capital in nature which must be capitalized if they incurred for acquisition of Qualifying capital asset...

Loans & advance shown on the asset side of the balance sheet because this is assets now that why we are shown in the asset side of the balance sheet.

Loans and advance showing in asset side in BS

Loans and advances is an repayable item to the company so its shown in asset side in BS

What is a pf, Esi Rate A.S. Year 2011-12

PF Contribution Rate : 12 % by employee & 12 %  by Company on BASIC SALARY + DA + HRA

ESI Contribution Rate : 1.75% by Employee & 4.75 % by Company on BASIC SALARY + DA + HRA

SLM method & WDV method

DEPRECIATION METHODS: Fixed assets differ from each other in their nature so widely that the same depreciation methods cannot be applied to each. The following methods have therefore been evolved for ...

Depreciation refers to decrease in the value of assets due to fear of obsolete and use, in-fact most of the assets have limited useful life. but there are some examples like land value of which almos...

The FA cycle is -
1. Procurement
2. Deployment
3. Usage / Consumption
4. Upgradation
5. Disposal.

These are the stages of a Fixed asset.

The Asset Lifecycle contains the following:

1. Procurement of the asset.
2. Deployment of asset.
3. Use of Asset.
4. Upgrading the asset if required.
5. Decommissioning the asset
6. Disposal or salvage of asset.

WDV method is better method to calculate depreciation. In initial years cost of product reduced more and WDL record depreciation higher in initial years.

A.A We can decided which method of deprecation is best on the basis of usefulness (benefits) provided by the asset.When we prefer SLM:-we preferred SLM where the equal amount of  benefit is derived ...

The expenses can only be capitalised in the following circumstances:
1. It must be related with the asset.
2. It must be essential to make the asset in working condition.
3. It must be above the capitalisation limit as per the prescribed policies.

The amount spent on acqusition of an asset is Expenditure and not as Expense. The nature of expenditure, the benifit of which will be lost for more than an year and the expenditure would be for purchase of an asset which will be used in enhanced production and not for resale.

If a company purchase plant & machinery for its factory use by investing large amount of money and assume that expected life of P&M is 10 years and which generates revenve for the co...

There are 2 types of Fixed Assets:Tangible fixed assets:  Tangible assets are those that have a physical substance and can be touched, such as Land, Building, furniture & Fixture, Plant &...

There are 3 types of Fixed Asset:-
1- Capitalized Assets
2- CIP Assets
3- Group Assets

Loading, Unloading and Installation Charges during the time of shifting of the company cant be capitalised as such these Expenses are of (Opex) Operating Expenses nature.

When asset is added:------------------------------Asset Cost A/C DrAsset Clearing A/C CrWhen there is a change in the Asset:-----------------------------------------------If change impacts increase in...

At the time of additionAssets NA account -------drTo asset clearing account ----CRAt the time of retirementthe nbv amount has been moved to the gain & loss account.In sale case we need to pass a j...

1. Fixed Instalment method
2. Written down value method
3. Annuity method
4. Sinking fund method
5. Machine hour rate method
6. Production units method
7. Accelerated method

Following are the depriciation methods that are used in FA module:

1. Flat rate method
2. Calculated method
3. Table method
4. Formula method
5. Production method
6. STL
7. DEMINISHING
8. Time-Hour

Once the asset is purchased it is recorded in the books of accounts by using money measurement concept. It takes in to account only the expenditure incurred for purchasing the asset.

As per the company procedures depreciation will be calculated. Depreciation fund will be maintained.