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11th Grade > Accountancy

DEPRECIATION MCQs

Total Questions : 61 | Page 5 of 7 pages
Question 41. The estimated value of depreciable assets after its useful life is called
  1.    Actual value
  2.    Replacement value
  3.    Disposal (Residual) value
  4.    Current value.
 Discuss Question
Answer: Option C. -> Disposal (Residual) value


Question 42. Depreciation is primarily provided due to:
  1.    Reduce tax burden.
  2.    Replacement of fixed asset in future.
  3.    Comply with legal requirements.
  4.    All of the above.
 Discuss Question
Answer: Option B. -> Replacement of fixed asset in future.


Question 43. Depreciation starts on a machine from the Date:
  1.    It is purchased.
  2.    It is put to use.
  3.    It is installed.
  4.    Any of the above.
 Discuss Question
Answer: Option B. -> It is put to use.


Question 44. In the books of D. Ltd. the machinery account shows a debit balance of Rs.60, 000 as on April 1st, 2003. The machinery was sold on September 30, 2004 for Rs.30, 000. The company charges depreciation @ 20% p.a. (FY April to March) on diminishing balance method. What will be the Profit or Loss on sale of machinery?
  1.    Rs.13, 200 Profit.
  2.    Rs.13, 200 Losses.
  3.    Rs.6, 800 Profit.
  4.    Rs.6, 800 Losses.
 Discuss Question
Answer: Option B. -> Rs.13, 200 Losses.


Question 45. An asset was purchased for Rs.25, 000 and was depreciated under Reducing Balance Method at the rate of 10% p.a. What is the value of the asset at the end of three years?
  1.    Rs.25,000
  2.    Rs.25,000
  3.    Rs.18,225
  4.    None of the above.
 Discuss Question
Answer: Option C. -> Rs.18,225


Question 46. Original cost of an assets Rs.2, 50,000, scrap value Rs.10, 000. Depreciation for 2nd year @ 10% p.a. under W.D.V. method will be: /4
  1.    Rs.21,600
  2.    Rs.24,000
  3.    Rs.22,500
  4.    None of the above.
 Discuss Question
Answer: Option C. -> Rs.22,500


Question 47. On 1st January, 2008, A Ltd. Purchased a machinery for Rs.50, 000 and spent Rs.3, 500 on its carriage and Rs.2, 500 on its installation. Its useful life is 10 years and scrap value is Rs.6, 000. Depreciation for the year under straight line method will be:
  1.    Rs.4,600
  2.    Rs.5,000
  3.    Rs.5,600
  4.    None of the above
 Discuss Question
Answer: Option B. -> Rs.5,000


Question 48. A Plant of Rs.3, 000 was sold for Rs.4, 200. Depreciation provision to date was Rs.400 and commission paid to selling agent was Rs.350 and labour charges paid for removing the plant was Rs.100 Profit on sale of plant will be:
  1.    Rs.1,200
  2.    Rs.1,000
  3.    Rs.1,150
  4.    None of these
 Discuss Question
Answer: Option C. -> Rs.1,150


Question 49. A purchased a mine for Rs.5, 00,000. Minerals in the mine were expected to be 10, 00,000 tones. In the first year, 1, 00,000 tones of minerals were used. What is the depreciation for the first year?
  1.    Rs.40,000
  2.    Rs.50,000
  3.    Rs.60,000
  4.    None of these
 Discuss Question
Answer: Option B. -> Rs.50,000


Question 50.

Original cost = Rs.1, 50,000, Estimated life = 5 years, Expected salvage value

= Rs.3, 000. Rate of depreciation p.a. =?

  1.    19.6%
  2.    20%
  3.    19.8%
  4.    20.8%
 Discuss Question
Answer: Option A. -> 19.6%


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