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11th Grade > Accountancy

DEPRECIATION MCQs

Total Questions : 61 | Page 4 of 7 pages
Question 31. Depreciation is charged on
  1.    Fixed assets.
  2.    Current assets.
  3.    Both fixed and current assets.
  4.    None of the above.
 Discuss Question
Answer: Option A. -> Fixed assets.


Question 32. Which of the following asset generally assumed not to depreciate?
  1.    Machinery
  2.    Building
  3.    Land
  4.    All of the above
 Discuss Question
Answer: Option C. -> Land


Question 33. Under the annuity method of depreciation, the charge is
  1.    Increasing every year.
  2.    Decreasing every year.
  3.    Fixed for all years.
  4.    Fluctuating from year to year.
 Discuss Question
Answer: Option B. -> Decreasing every year.


Question 34. Under the diminishing balance method, the amount of depreciation is calculated on
  1.    The written-down value of the asset.
  2.    The market value of the asset.
  3.    The original cost of the asset.
  4.    The expected realizable value of the asset.
 Discuss Question
Answer: Option A. -> The written-down value of the asset.


Question 35. Depreciation charges are
  1.    Cash expenses.
  2.    Financial expenses.
  3.    Non-cash expenses.
  4.    Non-operating expenses.
 Discuss Question
Answer: Option C. -> Non-cash expenses.


Question 36. Book value means
  1.    Expected sale price.
  2.    Current market price if purchased now.
  3.    Value as shown in the books of account.
  4.    Original acquisition price.
 Discuss Question
Answer: Option C. -> Value as shown in the books of account.


Question 37. Which method of depreciation would you recommend for coal mines?
  1.    Diminishing balance method.
  2.    Fixed installment method.
  3.    Sum of year’s digits.
  4.    Depletion method.
 Discuss Question
Answer: Option C. -> Sum of year’s digits.


Question 38. The depreciation value after two years of an asset costing Rs.10, 000 depreciated at 10% on fixed installment is Rs. ———— and on reducing balance method is ———–.
  1.    Rs.8, 100 and Rs.8, 000.
  2.    Rs.9, 000 and Rs.8, 000.
  3.    Rs.8, 000 and Rs.8, 100.
  4.    Rs.8, 000 and Rs.9, 000.
 Discuss Question
Answer: Option C. -> Rs.8, 000 and Rs.8, 100.


Question 39. A machinery was purchased on 1-1-2006. It was delivered on 1-4-2006. The installation was completed on 1-7-2006. The trial run was completed on 30-9-2006 and was put to use from 1-12-2006. The effective period for calculation of depreciation for the year 2006 is
  1.    10 months
  2.    9 months
  3.    1 month
  4.    3 months
 Discuss Question
Answer: Option C. -> 1 month


Question 40. In case of mineral resources:
  1.    Depreciation is provided as per SLM
  2.    Depreciation is provided as per WDV
  3.    Depreciation not provided instead depletion is charged
  4.    None of the above.
 Discuss Question
Answer: Option C. -> Depreciation not provided instead depletion is charged


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