Depreciation(11th Grade > Accountancy ) Questions and answers for exam Preparation

11th Grade > Accountancy

DEPRECIATION MCQs

Total Questions : 61 | Page 2 of 7 pages

Question 11. A machine with a cost of Rs 100000 & accumulated depreciation of Rs 80,000 & was sold at a loss of Rs 6000. Bank account shall have been debited by ___

Rs 26000
Rs 14000
Rs 6000
None of the above

Discuss Question

Answer: Option B. -> Rs 14000
:
B
Book value = Rs 20,000
Loss = Rs 6000
Amount received = Rs 20000 - 6000 = Rs 14000

Question 12. In which method, the depreciation is constant and in which method, the depreciation is higher in initial years when compared to later years?

SLM & WDV
WDV & SLM
SLM & SLM
WDV & WDV

Discuss Question

Answer: Option A. -> SLM & WDV
:
A
If a firm is using SLM method, then the amount of depreciation is same over the useful life of asset, while if the method of depreciation is WDV then in the beginning the amount of depreciation is higher.

Question 13. If an accumulated depreciation account is in use, then the entries for the year’s depreciation would be:

Credit Asset Account, debit Depreciation Account
Debit Asset Account, credit Profit and Loss Account
Credit Accumulated Depreciation Account, debit Depreciation Account
Credit Profit and Loss Account, debit Accumulated Depreciation Account

Discuss Question

Answer: Option C. -> Credit Accumulated Depreciation Account, debit Depreciation Account
:
C
The correct entry would be:
Depreciation A/c Dr
To Accumulated Depreciation A/c

Question 14. The annual depreciation charged under _______ method remains fixed during the life of asset, while it diminishes every year in ______ method

WDV & SLM
SLM & WDV
SLM & SLM
WDV & WDV

Discuss Question

Answer: Option B. -> SLM & WDV
:
B
The annual depreciation charge in SLM remains fixed during the life of the asset. In contrast, the amount of depreciation in WDV method diminishes every year.

Question 15. The cost of the asset is 60,000 and depreciated at 12% p.a. using the written down method. at the end of three years, it will have a net book value of ______

Rs 40888
Rs 43888
Rs 45332
Rs 40000

Discuss Question

Answer: Option A. -> Rs 40888
:
A
Year
Value
Depreciation
WDV
1
60000
7200
52800
2
52800
6336
46464
3
46464
5579
40888

Question 16. Cost of the fixed asset – Salvage value =

Market value
Book value
Depreciable cost
None of these

Discuss Question

Answer: Option C. -> Depreciable cost
:
C
Cost of the fixed asset – Salvage value = Depreciable cost.

Question 17. A car was purchased for Rs55000. Its residual value was estimated to be Rs5000 with useful life of 5 years. What will be the depreciation expense?

12000
11000
10000
6000

Discuss Question

Answer: Option C. -> 10000
:
C
Depreciation = (55000-5000)/5

Question 18. The Diminishing balance method means a method by which-

The rate of depreciation falls year by year
The amount on which depreciation is calculated falls year by year
The rate and amount which is applied falls year by year
None of the above

Discuss Question

Answer: Option B. -> The amount on which depreciation is calculated falls year by year
:
B
The Diminishing balance method means a method by which the amount on which depreciation is calculated falls year by year.

Question 19. If the estimated useful life of an asset is 10 years, the straight line depreciation rate would be:

0.01%
0.1 %
1%
10%

Discuss Question

Answer: Option D. -> 10%
:
D
If the estimated useful life of an asset is 10 years, the straight line depreciation rate would be 10%.

Question 20. A non-current asset cost Rs 120,000 and is depreciated at 20% using the reducing balance method. After 3 years the net book value (WDV) is: