CBSE Questions for Class 11 Commerce Accountancy Depreciation, Provision And Reserves Quiz 12 - MCQExams.com

XYZ purchased a plant having estimated useful life of $$15$$ years, however after $$5$$ year the remaining life of the asset is revised to $$5$$ years. Rs. $$40,000$$ being the remaining depreciable amount will be charged/allocated over ____________.
  • $$5$$ years
  • $$10$$ years
  • immediately
  • charged to revaluation a/c
___________ of depreciation takes into account interest on capital outlay.
  • Sum of digit method
  • Annuity method
  • Depletion method
  • Straight line method
The pattern of annual depreciation charge of an asset for the three years was Rs. $$5000$$, Rs. $$4500$$ and Rs. $$4050$$. Discuss the rate of depreciation charge.
  • $$15\%$$ on WDV
  • $$15\%$$ on SLM
  • $$10\%$$ on WDV
  • $$90\%$$ on WDV
An asset is subject to $$10\%$$ depreciation on reducing balance method. If the annual depreciation for the year $$2013-14$$ amounts to Rs. $$4500$$. The book value of the asset as on $$31.03.14$$ will be ___________.
  • Rs. $$45,000$$
  • Rs. $$40,500$$
  • Rs. $$50,000$$
  • Rs. $$48,000$$
An asset is subject to $$10\%$$ depreciation on reducing balance method. If the annual depreciation for the year $$2013-14$$ amounts to Rs. $$4500$$. The book value of the asset as on $$01.04.13$$ will be __________.
  • Rs. $$45,000$$
  • Rs. $$40,500$$
  • Rs. $$50,000$$
  • Rs. $$48,000$$
Which of these is an example of accelerated method of depreciation.
  • Written down value method
  • Straight line method
  • Sinking fund method
  • Annuity method
A firm has a policy of charging depreciation on Plant and Machinery @20% under WDV method. Find the book value of the plant as on 31.03.09 if the same was purchased on 1.04.07 for Rs.50,000.
  • Rs.40,000
  • Rs.36,000
  • Rs.32,000
  • Rs.30,000
An asset was shown in the Balance sheet during the last three years at Rs. $$50000$$, Rs. $$45000$$ and Rs. $$40500$$. Find the depreciation for the $$4$$th year ___________.
  • Rs. $$4000$$
  • Rs. $$5000$$
  • Rs. $$4050$$
  • Rs. $$4500$$
In case there is revision in estimated useful life of a depreciable asset, the remaining unamortized amount is charged to __________.
  • remaining useful life
  • written off in the current year as current charges
  • written off in the current year as prior period adjustment
  • treated as deferred revenue expenditure to be written off in $$3$$ years
Net surplus/deficiency on disposal/replacement/discarding of an asset is credited/charged to ___________.
  • Trading a/c
  • Capital Reserve a/c
  • Profit and loss a/c
  • Revaluation a/c
Which of the following is a true statement?
  • Under Income-tax Act reducing balance method of depreciation is allowed
  • Land is subject to depreciation at a very nominal rate
  • Depreciation is the process of valuation of the assets
  • Depreciation is a cash expense
If cost of an asset is Rs. $$8,000$$, life is $$3$$ years and estimated scrap value is Rs. $$1,000$$, the rate of depreciation under WDV method is ___________.
  • $$33.3\%$$ apprx
  • $$66.6\%$$ apprx
  • $$53.6\%$$ apprx
  • $$75\%$$ apprx
ABC Ltd, acquired a new Machine for Rs. $$500,000$$ on $$1$$st April $$2010$$ and spent Rs. $$20,000$$ on its installation and Rs. $$5,000$$ on transportation. The firm charges depreciation at $$10\%$$ on WDM method. The depreciation charges for 2010-11 will be ___________.
  • Rs. $$50,000$$
  • Rs. $$52,500$$
  • Rs. $$47,250$$
  • Rs. $$47,650$$
Depletion method is used in all except __________.
  • Copper mine
  • Stone quarry
  • Plant and machinery
  • Coal mine
A purchased a machine for Rs. $$200,000$$ and incurred Rs. $$5000$$ on its installation and commissioning. After $$3$$ yrs it is sold for Rs. $$100,000$$ resulting into a loss of Rs. $$44,850$$. The book value of the machine on the date of sale is ___________.
  • Rs. $$200000$$
  • Rs. $$205000$$
  • Rs. $$144850$$
  • Rs. $$139850$$
A machinery was purchased on $$1-1-2013$$. It was delivered on $$1-4-2013$$. The installation was completed on $$1-7-2013$$. The trail run was completed on $$30-9-2013$$ and was made available for use on $$1-10-2013$$. The actual utilization started from $$1-12-2013$$. The effective period for calculation of depreciation for $$2013$$ is __________.
  • $$10$$ months
  • $$9$$ months
  • $$1$$ months
  • $$3$$ months
A company purchased new Machine for Rs. $$50,000$$ on $$1$$st April and spent Rs. $$10,000$$ on its installation and Rs. $$5,000$$ on transportation. The useful life of the machine is estimated $$10$$years. The firm provides depreciation using sum of years digit method. What is the depreciation for the last year of working life of the machine?
  • Rs. $$936$$
  • Rs. $$1,182$$
  • Rs. $$1,325$$
  • Rs. $$1,013$$
Secret reserve is created by way of_________.
  • excess provision of bad debts
  • undervaluation of closing stock
  • excess provision of depreciation
  • all the three
On $$1-1-2014$$, a company acquired a car for Rs. $$350,000$$ on instalment basis and paid Rs. $$1,50,000$$ as down payment whose cash price was Rs. $$3,00,000$$. During $$2014$$, one instalment of Rs. $$50,000$$ (including Rs. $$15,000$$ interest) was paid. The amount of depreciation for the year $$2016$$ at $$10\%$$ on SLM is ___________.
  • $$Rs.35,000$$
  • $$Rs.20,000$$
  • $$Rs.30,000$$
  • $$Rs.18,500$$
Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from -
I. Use
II. Effluxion of time
III. Obsolescence through technology and market changes
Select the correct answer from the options given below
  • I and II.
  • II and III.
  • I and III.
  • Any of the above.
Which of these is known as accelerated method of depreciation?
  • double declining method
  • sum of years digit method
  • written down method
  • all the three
Which of these is not an accepted method of depreciation
  • Straight line method
  • Sinking fund method
  • Written down method
  • Market value
Providing depreciation on fixed assets over its useful life is an application of __
  • Money measurement
  • Matching concept
  • Cost concept
  • Entity concept
On 1.1.06 Novel Industries pin-chased new office equipment for Rs. 150,000 with a working life of 10 years. The estimated scrap value at the end of 10 years is estimated to be Rs. 20,Find the depreciation for the 10th year under Straight-Line Method.
  • 15,000
  • 13,000
  • 12,000
  • 10,000
Accumulated Depreciation account has a _____________.
  • Credit Balance only
  • Debit Balance only
  • Credit or Debit balance
  • All of the above
A company purchased a new machine for Rs$$\,5,00,000$$ and machine's test run was started to make sure that machine works properly. There was expense of Rs $$5,000$$ incurred on test run, however the sale proceeds of test production were Rs $$2,000$$. You are required to find out the total cost of machine?
  • $$5,00,000$$
  • $$5,05,000$$
  • $$5,03,000$$
  • $$4,95,000$$
The cost of the machine is _______
  • Rs. $$5,40,000$$
  • Rs. $$5,45,000$$
  • Rs. $$4,70,000$$
  • Rs. $$5,50,000$$
A purchased an old computer costing Rs. $$10,000$$ and incurred Rs. $$1,000$$ on its repair and Rs. $$500$$ on its packing. He sold the computer at $$20\%$$ margin on selling price. The sales value will be _________________.
  • Rs. $$12,500$$
  • Rs. $$11,000$$
  • Rs. $$14,375$$
  • Rs. $$13,800$$
Q.Ltd acquired machinery on $$1$$st 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 $$31$$st December every year. Closing balance of machinery for $$1$$st & $$2$$nd year as per fixed instalment method will be Rs............
  • $$72,000, 64,000$$
  • $$74,000, 66,600$$
  • $$74,000, 72,000$$
  • $$74,000, 66,000$$
Depreciable value of an asset is equal to _________.
  • Cost + Scrap value
  • Cost + Market price
  • Cost - Scrap value
  • None of them
The book value of an asset is defined as ___________.
  • cost minus salvage value
  • cost minus accumulated depreciation
  • cost minus salvage value minus accumulated depreciation
  • estimated fair market value
A firm owns a fleet of vehicles acquired at a total cost of Rs$$4,80,000$$. Accumulated depreciation up to the beginning of the current year is Rs$$2,12,400$$. Vehicles are depreciated at $$25\%$$ p.a using the reducing balance method. The written down value of the vehicles by the end of the current year would be:-
  • $$Rs.2,67,600$$
  • $$Rs.66,900$$
  • $$Rs.1,47,600$$
  • $$Rs.2,00,700$$
S Ltd acquired a machine on 1st January, 2010 at a cost of Rs. $$1,40,000$$ and spent Rs. $$10,000$$ on its installation. The firm writes off depreciation at $$15$$% p.a on WDV. The books are closed on 31st December every year. After 3 years machine sold for Rs. $$97,000$$. Profit/Loss on sale = ? 
  • Profit - Rs. $$4,881$$
  • Loss - Rs. $$4,881$$
  • Profit - Rs. $$11,023$$
  • Loss - Rs. $$11,023$$
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as _______.
  • Appreciation
  • Depreciation
  • Fluctuation
  • None of these
K & Co. acquired machinery on $$1$$st July $$2011$$ at a cost of Rs$$45,000$$ and spent Rs$$5,000$$ for its installation. The firm writes off depreciation at $$10\%$$ p.a on the original cost every year. The books are closed on $$31st$$ March every year. Depreciation for the year ended $$31st$$ March $$2012$$ & $$31$$st March $$2013$$ will be Rs....... & Rs ..............
  • $$3,750 & 5,000$$
  • $$5,000 & 3,750$$
  • $$3,750 & 3,750$$
  • $$5,000 & 5,000$$
A firm acquired machinery on 1st July 2019 at a cost of Rs 45,000 and spent Rs 5,000 for its installation. The firm writes off depreciation at 10% per annum on the diminishing balance method. The books are closed on 31 st March every year. Depreciation for the year ended 31st March 2020 & 31st March 2021 will be Rs_______& Rs________.
  • $$3,750, 5,000$$
  • $$4625, 3,750$$
  • $$3,750, 4,625$$
  • $$5000, 3,750$$
Original Cost = Rs. 1,00,Life = 5 years. Expected salvage value = Rs. 2,000
Rate of depreciation p.a.as per straight line method is _______.
  • 20.0%
  • 19.8%
  • 19.6%
  • 19.4%
On the basis of the information given below answer the following question.
In the year 2014-15 C Ltd. purchased a new machine and made the following payments in relation to it:-
ParticularsRs
Cost as per supplier's list
Agreed discount
Delivery charged
Erection charges
Annual maintenance charges
Additional maintenance charges
Additional component to increase capacity of machine
Annual insurance premium
5,20,000
50,000
10,000
20,000
30,000
40,000
5,000
If depreciation is provided @ 10 %  p.a, SLM depreciation for 3rd year will be:-
  • Rs$$54,000$$
  • Rs$$54,5000$$
  • $$47,000$$
  • $$55,000$$
Hi-Fi Ltd. acquired machinery on 1st January 2012 at a cost of Rs 36,000 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. 
Closing balance of machinery account for 1st & 2nd year will be Rs.____& Rs _____.
  • $$32,400, 29,160$$
  • $$36,000, 36,000$$
  • $$32,400, 36,000$$
  • $$36,000, 32,400$$
Y Ltd. purchased a machine on 1.1.2012 for Rs 12,Installation expenses were Rs 1,Residual value after 5 years RsDepreciation is provided under WDV. Depreciation rate is 20%. Depreciation for 3rd year = ?
  • $$1,664$$
  • $$1,536$$
  • $$1,600$$
  • None of the above
On the basis of the information given below answer the following question.
In the year 2014-15 C Ltd. purchased a new machine and made the following payments in relation to it:
ParticularsRs
Cost as per supplier's list
Agreed discount
Delivery charged
Erection charges
Annual maintenance charges
Additional maintenance charges
Additional component to increase capacity of machine
Annual insurance premium
5,20,000
50,000
10,000
20,000
30,000
40,000
5,000
If depreciation is provided @ 10 % p.a, WDV depreciation for 3rd year will be:-
  • Rs$$43,740$$
  • Rs$$44,145$$
  • Rs$$38,070$$
  • Rs$$44,550$$
On Sept 01,2012,CAS Travels Ltd. bought four Metador  van costing Rs. 2,40,000 each. The company expected to fetch a scrap value of 25% of the cost price of the vehicles after ten years. The vehicles were depreciated under the fixed installment method up to March 31,With effect from April 01, 2014, the company decided to introduce the diminishing balance method of depreciation @ 20% p.a. instead of the fixed installment method. The company sold one of the vans at Rs. 70,000 on March 31,The rate of depreciation charged up to March 31, 2014 was __________ .
  • 10.0%
  • 9.0%
  • 8.5%
  • 7.5%
  • Both Assertion and Reason are correct and Reason is the correct explanation for Assertion
  • Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion
  • Assertion is correct but Reason is incorrect
  • Assertion is incorrect but Reason is correct
On 1-4-2012 balance in plant account was Rs. 3,77,On 1-7-2012, purchased new machine for Rs.50,000 (installation expenses Rs.2,500). A sum of Rs. 30,000 was paid on the same date and balance Rs. 30,000 was paid on maycompany provides depreciation @15% p.a. on reducing balance method and close accounts on 31st March each year. Depreciation for the year ended 31-3-2013=?
  • Rs. 62,593
  • Rs. 64,562
  • Rs. 60,062
  • Rs. 61,543
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