If a concern proposes to discontinue its business from March 2015 and decides to dispose of all its assets within a period of $$4$$ months, the Balance Sheet as on March 31, 2015 should indicate the assets at their ______.

Cost price or market value, whichever is lower

MCQ Questions for Class 11 Commerce Accountancy Depreciation, Provision And Reserves Quiz 7

Which of the following expenses is NOT included in the acquisition cost of a plant and equipment?

0%
Cost of site preparation.
0%
Delivery and handling charges.
0%
Installation costs.
0%
Financing costs incurred subsequent to the period after plant and equipment is put to use.

Which of the following is the normal balance of an accumulated depreciation account?

0%
Debit balance.
0%
Credit balance.
0%
Nil balance.
0%
(A) or (B).

If a concern proposes to discontinue its business from March 2015 and decides to dispose of all its assets within a period of

4

$4$ months, the Balance Sheet as on March 31, 2015 should indicate the assets at their ______.

0%
Historical cost
0%
Net realizable value
0%
Cost less depreciation
0%
Cost price or market value, whichever is lower

XYZ firm has imported a machine from abroad. Which of the following is NOT the element of machine's cost?

0%
Purchase price of machine.
0%
Import duty.
0%
Demurrage charges.
0%
Refundable tax.

An alternative term used for accumulated depreciation expenses?

0%
Provision for depreciation.
0%
Cumulative depreciation.
0%
Targeted depreciation.
0%
Depletion.

The number of production of similar units expected to be obtained from the use of an asset by an enterprise is called as ______.

0%
Unit Life
0%
Useful Life
0%
Production Life
0%
Expected Life

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

0%
The assumption that the asset shall be equally useful throughout its life seems to be illogical.
0%
It does not take into account the effective utilization of the asset.
0%
Depreciation remains constant under this method over the useful life of the asset, hence true financial results cannot be shown by this method if use of the asset differs from year to year.
0%
All of the above.

Which of the following statement is incorrect?

0%
Depreciation is the expense charged to profit and loss account before arriving at the net profit for the year.
0%
The cost of fixed asses in the form of depreciation has to be matched against the revenues of the years over which the asset is used.
0%
Depreciation means appointment or allocation of the cost of the fixed asset over its useful life.
0%
None of the above.

Which of the following is a double entry for depreciation expenses?

0%
Accumulated depreciation debit and depreciation expenses credit.
0%
Depreciation expenses debit and accumulated depreciation credit.
0%
Cash debit and depreciation expenses credit.
0%
Depreciation expenses debit and cash credit.

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

In the calculation of depreciation, all of the following items are actually estimates except: _____.

0%
Useful life
0%
Residual Value
0%
Historical Cost
0%
Salvage Value

For which of the following asset depreciation can be applied?
(I) Land
(II) Furniture
(III) Machinery

0%
(II) and (III)
0%
(II) only
0%
(I) and (III)
0%
All (I), (II) and (III)

Q Ltd. acquired machinery on 1st January 2011 at a cost of Rs.

72, 000

$72,000$ and spent Rs.

8, 000

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

10

$10$ % p.a on the original cost every year. The books are closed on 31st December every year, Closing balance of machinery account for 1st and 2nd year as per fixed instalment method will be Rs. _______

0%
$72,000$ , $64,000$
0%
$74,000$ , $66,600$
0%
$74,000$ , $72,000$
0%
$74,000$ , $66,000$

Z Ltd. acquired machinery on 1st January 2011 at a cost of Rs.

72, 000

$72,000$ and spent Rs.

8, 000

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

10

$10$ % p.a on the original cost every year. The books are closed on 31st December every year. Depreciation for 1st and 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 method is applicable in case of wasting assets, i.e., mines, quarries, oil well etc.?

0%
Inventory system of depreciation.
0%
Machine hour rate.
0%
Sum of years digit.
0%
Depletion Method.

Which of the following is odd with reference to depreciation ?

0%
Land.
0%
Machinery.
0%
Furniture.
0%
None if the above.

A manufacturer owns three machines - the first acquired on 1.1.2011 for Rs.

1, 10, 000

$1,10,000$ , the second on 1,7,2013 for Rs.

90, 000

$90,000$ , and the third on 1.10.2015 for Rs.

1, 30, 000

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

10, 000

$10,000$ . Using the straight-lie 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

$12,000$ . Installation expenses were Rs.

1, 000

$1,000$ . Residual value after 5 years Rs.

500

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

10

$10$ % p.a Annual depreciation = ?

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

A firm owns a fleet of vehicles acquired at a total cost of Rs.

2, 64, 800

$2,64,800$ . Accumulated depreciation up to the beginning of the current year is RS.

1, 12, 400

$1,12,400$ . Vehicles are depreciated at

20

$20$ % p.a using the straight-line method. The written down value of the vehicles by the end of the current year would be -

0%
Rs. $99,440$
0%
Rs. $52,960$
0%
Rs. $2,11,840$
0%
Rs. $1,52,400$

Which of the following is/are advantage of Reducing balance method/WDV method?

0%
Under this method it is easy to calculate depreciation rate.
0%
Income tax authorities do not accept this method.
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.

Machinery costing Rs.

20, 00, 000

$20,00,000$ was purchased on 1.4.The installation charges amounting Rs.

5, 00, 000

$5,00,000$ were incurred. The depreciation at

10

$10$ % p.a on straight line method for the year ended 31st March, 2013 will be -

0%
$1,50,000$
0%
$2,50,000$
0%
$2,00,000$
0%
$50,000$

A Ltd. acquired a machine on 1st January, 2010 at a cost of Rs.

14, 000

$14,000$ and spent Rs.

1, 000

$1,000$ on its installation. The firm writes off depreciation at

10

$10$ % p.a. of the original cost every year. The books are closed on 31st December every year. After 3 years machine sold for Rs.

9, 000

$9,000$ . Profit/Loss on sale = ?

0%
Profit-Rs. $1,500$
0%
Loss- Rs. $1,500$
0%
Profit - Rs. $800$
0%
Loss - Rs. $800$

V Ltd acquired machine on 1st July, 2010 at a cost of Rs.

15, 000

$15,000$ . The firm writes off depreciation at

10

$10$ % pa.a on WDV. The books are closed on 31st March every year. On 30th June 2013 machine sold for Rs.

8, 000

$8,000$ . Profit/Loss on sale = ?

0%
Profit - Rs. $2,958$
0%
Loss - Rs. $2,958$
0%
Profit - Rs. $3,375$
0%
Loss - Rs. $3,375$

N Ltd. Purchase Machinery for Rs.

10, 00, 000

$10,00,000$ on 1.1.Installation expenses were Rs.

50, 000

$50,000$ . Life of the asset is 6 years at the end of which asset can be sold at Rs.

30, 000

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

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

Original cost =Rs.

88, 200

$88,200$ . Salvage value

4, 200

$4,200$ . Useful Life

= 3

$=3$ years. Depreciation rate = ?

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

C Ltd. acquired a machine on 1st January, 2010 at a cost of Rs.

14, 000

$14,000$ and spend Rs.

1, 000

$1,000$ on its installation. The firm writes off depreciation at

10

$10$ % p.a of the original cost every year. The books are closed on 31st December every year. On 31st May 2013 machine sold for Rs.

8, 000

$8,000$ . Profit/Loss on sale = ?

0%
Profit - Rs. $2,275$
0%
Loss - Rs. $2,275$
0%
Profit - Rs. $1,875$
0%
Loss - Rs. $1,875$

B Ltd acquired a machine on 1st January, 2010 at a cost of Rs.

14, 000

$14,000$ and spent Rs.

1, 000

$1,000$ on its installation. The firm writes off depreciation at

10

$10$ % p.a. of the original cost every year. The books are closed on 31st December every year. After 3 years machine sold for Rs.

13, 000

$13,000$ . Profit/Loss on sale = ?

0%
Profit - Rs. $2,500$
0%
Loss - Rs. $2,500$
0%
Profit - Rs. $2,200$
0%
Loss - Rs. $2,200$

Original cost =Rs.

12, 00, 000

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

2, 00, 000

$2,00,000$ . Useful Life

= 10

$=10$ years. Annual depreciation = ? and rate of depreciation = ?

0%
Rs. $1,00,000$ and $10$ %
0%
Rs. $1,00,000$ and $8.33$ %
0%
Rs. $1,20,000$ and $12$ %
0%
Rs. $1,20,000$ and $8.33$ %

Original cost =Rs.

1, 76, 400

$1,76,400$ . Salvage value

= 8, 400

$=8,400$ .Useful Life

6

$6$ years. Annual depreciation under SLM =?

0%
$29,400$
0%
$28,000$
0%
$30,800$
0%
None of the above

N Ltd purchased machine for Rs.

1, 00, 000

$1,00,000$ on 1.1.Installation expenses were Rs.

10, 000

$10,000$ . Life of the asset is 5 years at the end of which asset can be sold at Rs.

5, 000

$5,000$ . Depreciation rate is

15

$15$ % on WDV. Depreciation for 4th year =Rs. ?

0%
$9,212$
0%
$9,673$
0%
$10,594$
0%
$10,133$

In the books of SZ Ltd. the machinery account shows a debit balance of RS.

60, 000

$60,000$ as on 1.4.The machinery was sold on 30.9.2016 for Rs.

30, 000

$30,000$ . The company charges depreciation @ 20% under Written Down Value Method. Profit/Loss on sale = ?

0%
Rs. $13,200$ Profit
0%
Rs. $13,200$ Loss
0%
Rs. $6,800$ Profit
0%
Rs. $6,800$ Loss

The written down value of machine on 31st March 2013 is Rs.

72, 900

$72,900$ . The machine was purchased on 1st April, 2010, Depreciation is charged @

10

$10$ % p.a by diminishing balance method. The cost price of the machine = ?

0%
Rs. $1,00,000$
0%
Rs. $90,000$
0%
Rs. $81,000$
0%
Rs. $72,000$

Depreciation for the current year = ?

0%
Rs. $40,000$
0%
Rs. $50,000$
0%
Rs. $60,000$
0%
Rs. $1,00,000$

Loss on machine sold on 1.10.2002 in year 2002-2003 will be -

0%
Rs. $16,560$
0%
Rs. $3,240$
0%
Rs. $11,200$
0%
Rs. $7900$

On 1.1.2015, the Plant Account showed a balance of RS.

80, 000

$80,000$ . Out of the above, a Plant whose book vale was Rs.

10, 000

$10,000$ on that date, was sold for Rs.

6, 000

$6,000$ on 1.4.On 1.10.2015, the plant was purchased for Rs.

20, 000

$20,000$ . Depreciation is charged at

10

$10$ p.a on SLM basis and books of accounts are closed on 31st December each year. Balance of Plant on 31.12.2015 = ?

0%
Rs. $72,000$
0%
Rs. $92,000$
0%
Rs. $89,000$
0%
Rs. $83,000$

Depreciation on machine sold up to 1.10.2002 in year 2002-2003 will be -

0%
Rs. $16,500$
0%
Rs. $3,240$
0%
Rs. $11,200$
0%
Rs. $7,900$

Z Ltd. had balance of Rs.

4, 000

$4,000$ in its plant account and corresponding balance of accumulated depreciation account of that plant was Rs.

3, 200

$3,200$ . This plant was exchanged for new plant. The payment for the new plant consisted of trade-in-allowance of Rs.

1, 400

$1,400$ for the old one and the balance Rs.

4, 600

$4,600$ to be paid in cash. The old plant could have been sold for Rs.

1, 000

$1,000$ . In relation to this transaction, which of the following statement is correct?

0%
Provision for depreciation account will be credited by Rs. $3,200$
0%
Rs. $5,600$ will be debited to New Plant Account
0%
Profit and Loss Account will be debited by Rs. $200$
0%
All of the above

_________ is a secret reserve usually created to, provide for the lose by way of fluctuation in the value of investment.

0%
Investment Fluctuation Reserve
0%
Foreign Exchange Fluctuation Fund
0%
General Reserve
0%
Capital Reserve

Extract of trial balance of Mr.S on

31 - 3 - 2015

$31-3-2015$ is as follows.

Particulars	Dr. Rs.	Cr. Rs.
Furniture	$20,000$	-
Provision for depreciation	-	$2,000$
Addition to furniture on $31-1-2015$	$6,000$	-
Repair to furniture	$1,000$

Furniture is depreciated by

10 %

$10\%$ p.a. on original cost. Furniture will be shown in balance sheet at Rs.

0%
Rs. $21,900$
0%
Rs. $21,400$
0%
Rs. $16,000$
0%
Rs. $22,900$

ABC Industries Ltd. purchased a new Machinery on

1 - 1 - 2011

$1-1-2011$ for Rs.

2, 75, 000

$2,75,000$ and spent Rs.

25, 000

$25,000$ on its installation. Machine is subject to

10 %

$10\%$ depreciation on the original cost. The company sold the Machinery on

31 - 12 - 2015

$31-12-2015$ for Rs.

1, 45, 000

$1,45,000$ . Find out the accumulated depreciation on the Machine as on

31 - 12 - 2015

$31-12-2015$ .

0%
Rs. $1,25,000$
0%
Rs. $1,35,000$
0%
Rs. $1,05,000$
0%
Rs. $1,50,000$

Depreciation is a process of allocation of the cost of fixed asset.

0%
True
0%
False

M & Co. purchased a machine for a certain sum. The firm has a policy of charging

8

$8$ % depreciation on written down value. The depreciated value of machine after three years is Rs.

3, 89, 344

$3,89,344$ . Purchase price of machine = ?

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

Which of the following statements is TRUE?

0%
Provision for doubtful debts represents the amount that cannot be collected
0%
Cash balance on hand shows whether the business has earned Profit or Loss
0%
Free samples received are business gains
0%
The WDV of an assets depreciated on the reducing balance method can never become zero

There exists difference between the Written Down Value method and Diminishing Balance method of depreciation.

0%
True
0%
False

A company purchased plant for Rs.

50, 000

$50,000$ . The useful life of the plant is

10

$10$ years and the residual value is Rs.

5, 000

$5,000$ . 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

While preparing final account, to make provision for discount on debtors. which of the following adjustment entry will be passed?

Provision for Discount on Debtors A/c To Debtors A/c	Dr.
Profit & Loss A/c To Provision for Discount on Debtors A/c	Dr.
Provision for Discount on Debtors A/c To Trading A/c	Dr.
Debtors A/c To provision for Discount on Debtors A/c	Dr.

0%
A
0%
B
0%
C
0%
D

Equipment was purchased on 1st January 2012 for Rs.

25, 000

$25,000$ and is to be depreciated at

30

$30$ % based on reducing balance method. If the company closes its books of account on 31st March every year, what would be the net book value of the equipment as at 31st December, 2013?

0%
Rs. $12,250$
0%
Rs. $10,000$
0%
Rs. $17,750$
0%
Rs. $16,187$

A boiler was purchased by a company for Rs.20 lakhs. After 2 years its cost came down to Rs.10 lakhs. The salvage value of the boiler is Rs.2 lakhs. On which cost the depreciation for the asset will be calculated in Straight Line method?

0%
It will be calculated on the basis of its original cost of Rs.20 lakhs.
0%
It will be calculated on the basis of Rs.18 lakhs.
0%
It will be calculated on the basis of Rs.10 lakhs.
0%
It will be calculated by taking the average of all three costs.

An additional purchase was made for machine on 15.06.Under straight line method ________.

0%
depreciation will be changed from the date of purchase
0%
depreciation will be charged from the beginning of the year
0%
Both a & b
0%
None of the above

For an asset owned for more than one year, the depreciation charge for the year calculated using the reducing-balance basis at the rate of 35% would be arrived at as follows:

0%
35% x cost of the asset
0%
35% x (cost of the asset - accumulated depreciation)
0%
35% x accumulated depreciation
0%
35% x (cost of the asset + accumulated depreciation)

CBSE Questions for Class 11 Commerce Accountancy Depreciation, Provision And Reserves Quiz 7 - MCQExams.com

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Practice Class 11 Commerce Accountancy Quiz Questions and Answers

CBSE Questions for Class 11 Commerce Accountancy Depreciation, Provision And Reserves Quiz 7 - MCQExams.com

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Practice Class 11 Commerce Accountancy Quiz Questions and Answers

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