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Q: By which method is valuation carried out to be initial or prime cost less depreciation?
  • A. Initial cost-based valuation
  • B. Profit-based on valuation
  • C. Cost from detailed items
  • D. Estimated cost from accounts
Correct Answer: Option A - Initial cost based valuation–Prime or initial cost assumes that the value of a depreciating asset decrease uniformly over its effective life. Depreciation–It is a gradual less in the value of the property due to wear and tear, excess usage, age etc. → Method of deprecation– (i) Straight line method (ii) Constant percentage method (iii) Quantity survey method (iv) Sinking fund method
A. Initial cost based valuation–Prime or initial cost assumes that the value of a depreciating asset decrease uniformly over its effective life. Depreciation–It is a gradual less in the value of the property due to wear and tear, excess usage, age etc. → Method of deprecation– (i) Straight line method (ii) Constant percentage method (iii) Quantity survey method (iv) Sinking fund method

Explanations:

Initial cost based valuation–Prime or initial cost assumes that the value of a depreciating asset decrease uniformly over its effective life. Depreciation–It is a gradual less in the value of the property due to wear and tear, excess usage, age etc. → Method of deprecation– (i) Straight line method (ii) Constant percentage method (iii) Quantity survey method (iv) Sinking fund method