MCQ Questions for Class 10 Elements Of Book Keeping And Accountancy Depreciation Quiz 5

The amount charged to deprecation goes on declining in ________.

0%
Depreciation fund method
0%
Annuity method
0%
Written-down value method
0%
None of these

In which depreciation method Depreciation remains constant?

0%
Reducing balance method
0%
Balance sheet
0%
Depreciation method
0%
None of these

Under the diminishing balance method, the depreciation amount __________.

0%
constant each year
0%
declines each year
0%
increases each year
0%
None of these

Double-declining method is often used in ________.

0%
Singapore
0%
South Africa
0%
Japan
0%
India

Under the diminishing balance method, depreciation is calculated on:

0%
Scrap value
0%
On original value
0%
On book value
0%
None of them

Under the diminishing balance method, depreciation amount is a/an ________.

0%
Payment
0%
Receipt
0%
Expenditure
0%
None of these

Under the fixed installment method of providing depreciation it is calculated on

0%
Original cost
0%
On balance amount
0%
On scrap value
0%
None of them

Dinesh Garments purchased a machine for Rs. 50,000 and spent Rs. 6,000 on its erection. On the date of purchase, it was estimated that the effective life of the machine will be ten years and after ten years its scrap value will be Rs.The amount of depreciation for second year on straight-line basis is:

0%
Rs. 5,000
0%
Rs. 6,000
0%
Rs. 5,600
0%
Rs. 6,200

Explanation

Depreciation as per straight line

$=$ {Cost - Residual value}/{Useful life}

$= 56000-6000/10 = 5000$

Under straight line method, depreciation is calculated on:

0%
Written Down Value
0%
Salvage Value
0%
Original Cost
0%
Market Value

Madhur and Company purchases a machine for a certain sum. The company has a policy of charging 8% depreciation on written down value. The depreciated value of the machine after three years in the books of Madhur and Company is Rs. 3,89,What was the purchase value of machine.

0%
Rs. 5,00,000
0%
Rs. 4,60,000
0%
Rs. 4,23,000
0%
Rs. 5,52,000

Explanation

W.D.V. at machine at the end of 3rd year = Rs.

$3,89,344$
W.D.V. of machine at the beginning of 3rd year will be = 389344/100-8%= 389344/92%
= 423200
W.D.V. of machine at the beginning of 2nd year will be = 423200/92%= 4,60,000
W.D. V. of machine at the beginning of 1st year will be (or purchase value)= 4,60,00/92%= 5,00,000

Under which of the following method of depreciation charged does not declines?

0%
Fixed instalment method
0%
Sum of year digit method
0%
Double decline method
0%
All of the above

Dinesh Garments purchased a machine for Rs. 50,000 and spent Rs. 6,000 on its creation. On the date of purchase it was estimated that the effective life of the machine will be ten years and after ten years its scrap value will be Rs. 6,The amount of depreciation for each year on straight line basis is :

0%
Rs. 5,000
0%
Rs. 5,600
0%
Rs. 6,000
0%
None of the above.

Explanation

Depreciation = (Cost - Residual value)/Useful life Depreciation

$= 56000-6000/10 = 5000$

Under which of the following method depreciation charged declines?

0%
Diminishing balance method
0%
Sum of year digit method
0%
Double decline method
0%
All of the above

An equipment was purchased on 1st January, 2012 for Rs. 25,000 & is to be depreciated at 30% based on WDV method. If the company closes its books of account on 31 st March every year. What would be the net book value of the equipment as at 31 st December 2013:

0%
12,250
0%
10,000
0%
17,750
0%
12,545

Explanation

Value of Equipment as on

$1st Jan, 2012 = 25,000$
Less: Depreciation for the year 2012(25,000 x 30%)

$= 7,500$

$= 17,500$
Less: Depreciation for the year 2013(17,500 x 30%)

$= 5,250$
Net Book Value of the Equipment

$= 12,250$

A company purchased plant for 50,The useful life of the plant is 10 years and the residual value is 5,The management wants to depreciate it by straight line method. Rate of depreciation will be:

0%
8%
0%
9%
0%
10%
0%
None of the above

Explanation

Depreciation =

$\frac{50,000-5,000}{10}= 4,500$
Rate of depreciation=

$\frac{4,500}{50,000}X 100$ = 9%

The WDV of machine is Rs. 72,900, rate of depreciation @ 10%, period 3 years. Calculate the original cost of machinery.

0%
72,900
0%
80,000
0%
1,20,000
0%
1,00,000

Explanation

Cost of machinery =

$\frac{72900}{( 1 -10)^{3}} *100 = 1,00,000$

The portion of the acquisition cost of the asset, yet to be allocated is known as ___________________.

0%
Written Down Value
0%
Accumulated Value
0%
Realizable Value
0%
Salvage Value

The value of a fixed asset after deducting depreciation is known as its:

0%
Book value
0%
Market Value
0%
Face Value
0%
Realisable value

Under _____ method depreciation is provided as a fixed percentage of the written down value of the asset.

0%
Fixed instalment method.
0%
Annuity method
0%
Reducing balance method
0%
All of the above

A manufacturer owns three machines - the first acquired on

$1.1.2011 for 1,10,000$ , the second on

$1.7.2013$ for Rs

$90,000$ , and on the third on

$1.10.2015$ for Rs

$1,30,000$ . He expects to use each machine for ten years and realize the scrap for

$10,000$ . Using the straight-line method what is his depreciation for the year ended

$31.12.2015$ ?

0%
$33,000$
0%
$21,000$
0%
$30,000$
0%
$12,000$

Z Ltd. purchased a machine on

$1.1.2012$ for Rs

$12,000$ . Installation expenses were Rs

$1,000$ . Residual value after

$5$ years Rs

$500$ . Depreciation is provided under SLM. Department rate is

$10\%$ p.a Annual depreciation=?

0%
$1,700$
0%
$1,300$
0%
$2,100$
0%
$2,500$

Z Ltd. acquired machinery on

$1st$ January

$2011$ at a cost of Rs

$72,000$ and spent Rs.

$8,000$ for its installation. The firm writes off depreciation at

$10\%$ p.a on the original cost every year. The books are closed on

$31st$ December every year. Depreciation for

$1st$ &

$2nd$ year as per fixed instalment method will be Rs.__________

0%
$6,000, 6,000$ $
0%
$8,000, 8,000$ $
0%
$8,000, 7,200$ $
0%
$6,000, 8,000$ $

Which of the following is correct formula for charging depreciation under fixed instalment method?

0%
Depreciation = $\frac{Scrap Value - Original cost}{Life of the asset}$
0%
Depreciation = $\frac{Life of the asset - Scrap Value}{Original cost}$
0%
Depreciation = $\frac{Original Cost - Scrap Value}{Life of the asset}$
0%
Depreciation = $\frac{Scrap Value - Life of the asset}{Original cost}$

N.Ltd. purchase Machinery for Rs

$10,00,000$ on

$1.1.2012$ . Installation expenses were Rs

$50,000$ . Life of the asset is

$6$ years at the end of which asset can be sold at Rs

$30,000$ . Annual depreciation under straight line method will be =?

0%
$1,80,000$
0%
$1,66,667$
0%
$1,70,000$
0%
$1,71,667$

Which of the following is/are advantage of fixed instalment method of charging depreciation?

0%
This method is acceptable to income tax authorities.
0%
The value of the asset can be completely written off, i.e the value can be reduced to zero.
0%
The efficiency and usefulness is more in early years so depreciation amount is also more in early years and goes on diminishing year to year.
0%
All of the above.

Which of the following is/are cannot be treated as advantage of fixed instalment method of charging depreciation?

0%
It is a simple and easy method.
0%
It takes into account the effective utilization of the asset.
0%
This method can be applied where asset gets depreciated because of effluxion of time like furniture, equipments, patents, leasehold etc.
0%
All of the above

Original cost = Rs

$88,200$ . Salvage value =

$4,200$ . Useful Life =

$3$ years. Depreciation rate = ?

0%
$33.333\%$
0%
$31.746\%$
0%
$34.921\%$
0%
None of the above

A machine was purchased on 1st January 2013 for Rs 25,000 and is to be depreciated at 30 % p.a. based on reducing balance method. If the company closes books of account on 31st March every year, what would be the net book value of the equipment as at 31st December, 2014?

0%
Rs. $12,250$
0%
Rs. $10,000$
0%
Rs. $17,750$
0%
Rs. $12,545$

Original cost = Rs

$12,00,000$ . Salvage value = Rs

$2,00,000$ . Useful Life =

$10$ years. Annual depeciation = ? & rate of depreciation = ?

0%
$Rs1,00,000 & 10\%$
0%
$Rs1,00,000 & 8.33\%$
0%
$Rs1,20,000 & 12\%$
0%
$Rs1,20,000 & 8.33\%$

Hi-Fi Ltd acquired machinery on 1st January 2012 at a cost of Rs36,000 and spent Rs.4,000 for its installation. The firm writes off depreciation at 10% p.a. on WDV basis. The books are closed on 31st December. Depreciation for 1st& 2nd year will be Rs________ & Rs_______.

0%
$3,600, 3,240$
0%
$4,000, 3,600$
0%
$3,600, 4,000$
0%
$3,240, 2,916$

CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Depreciation Quiz 5 - MCQExams.com

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Practice Class 10 Elements Of Book Keeping And Accountancy Quiz Questions and Answers

CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Depreciation Quiz 5 - MCQExams.com

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Practice Class 10 Elements Of Book Keeping And Accountancy Quiz Questions and Answers

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