CBSE Questions for Class 11 Commerce Accountancy Depreciation, Provision And Reserves Quiz 3 - MCQExams.com

Any amount representing the following shall not be treated as "free reserves" ____________.
  • Revaluation of assets
  • National gains
  • Unrealised gains
  • All of the above
Net Block ( Book Value ) = Gross Block (cost) - __________.
  • Depreciation Till date
  • Value till date
  • Expenses till date
  • None of the Above
Components of Asset Disposal Account __________________.
  • Original cost of assets
  • Depreciation accumulated
  • Sale Price
  • Resulting Profit or loss on Asset
  • All of Above
Any addition or extension to asset must be ________ its useful life of that asset.
  • Depreciated
  • Appreciated
  • Ignored
  • Separated
While charging depreciation during sale of asset, ________ is Credited.
  • Asset A/c
  • Depreciation A/c
  • Profit and loss A/c
  • None
___________ is designed to provide a complete and clear view of all the transactions involved in the sale of asset under one account head.
  • Asset sale A/c
  • Asset Clear A/c
  • Asset Disposal A/c
  • None
________can take place either at the end of life of asset or during its useful life.
  • Purchase of asset
  • Disposal of asset
  • Collection of asset
  • None of the Above.
Whenever any provision is created __________ is debited.
  • Profit and loss A/c
  • Trading A/c
  • Cash A/c
  • None of the above
____________ does not suffer depreciation.
  • Plant and Machinery
  • Building
  • Land
  • Mineral Mines
___________ is used to writing off capital losses or issue of bonus shares in case  of a company.
  • Revenue Reserve
  • Capital reserve
  • Both
  • None of the Above
Under Straight line method depreciation is charged on the basis of ___________.
  • Original Cost
  • Cash Cost
  • Both
  • None
Revenue reserves are also known as ___________.
  • Free Reserves
  • Non Free Reserves
  • Owners reserves
  • None
Straight line method and written down value method are generally used for calculating ____________ amount in practice.
  • Depreciation
  • Appreciation
  • Historical cost
  • None of the Above
The annual amount of depreciation charged every year  _______ under written down value method.
  • Highest in earlier years and gets decline in later years
  • Highest in earlier years and gets increases in later years
  • lowest in earlier years and gets decline in later years
  • Lowest in earlier years and gets increases in later years
____________are available for Distribution of Dividends.
  • Capital Reserve
  • Revenue Reserve
  • Both
  • None
The annual amount of depreciation charged every year remains _______ under straight line method
  • Fixed
  • Changing
  • Zero
  • None
Under Written down value method the basis of charging depreciation is __________.
  • Net book value
  • Original cost
  • Net Realisable Value
  • None
___________ is created to provide funds for redemption of debentures.
  • Dividend Equalisation Reserve
  • Debenture Redemption Reserve
  • Redemption Fund
  • None
Original cost of asset : 80,000 scrap value : 10,000 Life of asset : 10 years
calculate annual depreciation ______.
  • 7000
  • 5000
  • 8000
  • None
Depreciation Account is Transferred to ___________account at the end of accounting year.
  • Trading Account
  • Asset Account
  • Profit and loss
  • None
Depreciation is charged to ___________ account.
  • Expense
  • Profit and loss
  • Trading
  • None of the above
When Provision for depreciation is maintain the total accumulated depreciation is only transferred to asset during its ___________.
  • Disposal
  • Purchases
  • Extension
  • None
Original cost of asset $$800000$$ 
Written down value : $$500000$$
Rate of depreciation : $$10$$%
Calculate depreciation under written down value.
  • $$50,000$$
  • $$45,000$$
  • $$55,000$$
  • None of these
__________ is accumulated in a separate account instead of being adjusted in asset account under provision method.
  • Cost
  • Depreciation
  • Expenses
  • None
It must be noted that the amount of provision for expenses and loss is a charge against the revenue of the __________ year.
  • Current
  • Next
  • Previous
  • None
_________ is made to know liability or expense pertaining to current accounting period.
  • Provision
  • Reserve
  • Appropriation
  • None
Accumulated Deprecation is _________  nature account.
  • Real
  • Personal
  • Nominal
  • None
_________ is created for the possible loss which may arise by non payment of debts by debtors.
  • Provision for Doubtful Debts
  • Provision for Discount on Debtors
  • Bad-debts on debtors
  • None
Depreciation is also charged on current assets.
  • True
  • False
Depreciation provides fund for replacement of asset.
  • True
  • False
If adequate maintenance expenditure is incurred, depreciation need not be charged.
  • True
  • False
Depletion term is used in case of intangible assets.
  • True
  • False
Depreciation must be changed so as to ascertain true profit or loss of the business.
  • True
  • False
The main cause of depreciation is wear and tear caused by its usage.
  • True
  • False
Depreciation is a non-cash expense.
  • True
  • False
When market value of an asset is higher than book value, depreciation is not charged.
  • True
  • False
Depreciation is _________ nature Account.
  • Real
  • Personal
  • Nominal
  • None
Depreciation is charged to reduce the value of asset to its market value.
  • True
  • False
Reserve created for maintaining a stable rate of dividend is termed as dividend equalisation fund.
  • True
  • False
Depreciation is decline in the value of assets.
  • True
  • False
Creation of reserve reduces taxable profits of the business.
  • True
  • False
Dividend equalization reserve is an example of general reserve.
  • True
  • False
Capital reserves are normally created out of free of distributable profits.
  • True
  • False
Depreciation is always charged on ______ Assets.
  • Current
  • Fixed
  • Fictitious
  • Intangible
The method of depreciation under which depreciation is calculated on original cost of an asset is known as ____________ .
  • Straight Line
  • Original Cost
  • Fixed Installment method.
  • All of these
The method of depreciation in which the amount of depreciation is not constant every year is _____________ .
  • Written Down Value method
  • Reducing Balance method
  • Diminishing Balance method
  • All of these
In Straight Line Method of depreciation, the amount of depreciation remain ___________ every year.
  • constant
  • increased
  • fluctuating
  • decreased
Which method is followed to have a uniform charge for depreciation and repairs and maintenance together :
  • Written Down Value Method
  • Straight Line Method
  • Double Declining Method
  • Sum of Years Digit Method
A provision is a/an ___________.
  • appropriation of profit
  • charge on the profit
  • investment
  • current asset
Under ________ system, amount of depreciation changes every year.
  • Reducing Balance
  • Fixed Instalment
  • Depreciation Fund
  • Annuity
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