Lakshya Education MCQs

Question: The value of a property decreases __________ with time in straight line method of determining depreciation.
Answer: Option A

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Question 1. The economic life of a large chemical process plant as compared to a small chemical plant is
  1.    Only slightly more
  2.    Much more
  3.    Slightly less
  4.    Almost equal
Answer: Option B
Question 2. Depreciation
  1.    Costs (on annual basis) are constant when the straight line method is used for its determination
  2.    Is the unavoidable loss in the value of the plant, equipment and materials with lapse in time
  3.    Does figure in the calculation of income tax liability on cash flows from an investment
  4.    All of the above
Answer: Option D
Question 3. The amount of compounded interest during 'n' interest periods is
  1.    P[(1+i)n-1)]
  2.    P(1 + i)n
  3.    P(1 - i)n
  4.    P(1 + in)
Answer: Option A
Question 4. Functional depreciation of an equipment is the measure of decrease in its value due to its
  1.    Ageing
  2.    Wear and tear
  3.    Obsolescence
  4.    Breakdown or accident
Answer: Option C
Question 5. Which of the following is not a component of working capital?
  1.    Raw materials is stock
  2.    Finished products in stock
  3.    Transportation facilities
  4.    Semi-finished products in the process
Answer: Option C
Question 6. Fixed charges for a chemical plant does not include the
  1.    Interest on borrowed money
  2.    Rent of land and buildings
  3.    Property tax, insurance and depreciation
  4.    Repair and maintenance charges
Answer: Option D

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