CBSE Questions for Class 11 Commerce Accountancy Depreciation, Provision And Reserves Quiz 8 - MCQExams.com

If an accumulated provision for depreciation account is in use then the entries for the year's depreciation would be ________.
  • debit Asset Account, credit Profit and Loss Account
  • credit Profit and Loss Account, debit Provision for Depreciation Account
  • credit Asset Account, debit Provision for Depreciation Account
  • credit Provision for Depreciation Account, debit Depreciation Account
An additional purchase of Rs.2,00,000 was made for a machine on 01.12.Under straight-line method, depreciation at the rate of 10% ________.
  • will be charged for half of the year
  • will be charged from the beginning of the year
  • Both a & b
  • None of the above
Which of the following is NOT a feature of depreciation?
  • Permanent
  • Continuous
  • Gradual
  • Temporary
In the Straight-line method of providing depreciation, depreciation _______.  
  • increase every year
  • remain constant every year
  • decreases every year
  • None of them
Invariably in diminishing balance method ________.
  • Book value becomes zero
  • Book value never becomes zero
  • Book value is negative
  • Book value is infinite
Under the diminishing balance method, depreciation _______.
  • increases every year
  • decreases every year
  • remains constant every year
  • None of them
In diminishing balance method ________.
  • amount of depreciation value keeps on decreasing over the passage of time
  • amount of depreciation value remains same over the passage of time
  • calculation of rate of depreciation is early
  • depreciation is charged on the original cost of asset
The method is specially suited to natural resources (mines, quarries, sand, pits etc.) is said to be ________.
  • Annuity Method
  • Depletion method
  • Revaluation method
  • Sum of Digits Method
A boiler was purchased by a company for Rs20 lakh after 2 years its cost came down to Rs10 lakh at present its cost is Rs15 lakh. How will we calculated the depreciation for this asset?
  • It wilt be calculated on the basis of its original cost 20 lakh rupees.
  • It will be calculated on he basis of 15 lakh rupees worth cost
  • It will be calculated on the basis of Rs. 10 lakh cost.
  • It will be calculated by taking the average of all three costs.
What impact does depreciation have on the cash account?
  • Depreciation only impacts the cash account if inflation has occurred.
  • Depreciation has no impact on the cash account.
  • Depreciation results in an increase to cash.
  • Depreciation results in a decrease to cash.
Which of the term is used to write off in reference to tangible fixed assets?
  • Depreciation
  • Depletion
  • Amortization
  • Both (b) and (c)
The amount charged to deprecation goes on declining in ________.
  • Depreciation fund method
  • Annuity method
  • Written-down value method
  • None of these
Under the diminishing balance method, the depreciation amount __________.
  • constant each year
  • declines each year
  • increases each year
  • None of these
Double-declining method is often used in ________.
  • Singapore
  • South Africa
  • Japan
  • India
Depreciation is __________ of an asset.
  • Valuation
  • Allocation
  • Sale value
  • All of the above
The total depreciation cannot exceed the  _______ of an asset.
  • Scrap value
  • Cost value
  • Market value
  • Depreciable value
Under the diminishing balance method, depreciation amount is a/an ________.
  • Payment
  • Receipt
  • Expenditure
  • None of these
Some of the benefits you receive with depreciation are____________.
  • income tax saving
  • customs tax saving
  • sales tax saving
  • excise duty saving
Asset that has a limited useful life are termed as:
  • Limited assets
  • Depreciation assets
  • Unlimited asset
  • None of these
Loss on sale of plant and machinery should be written off against:
  • Share premium
  • Depreciation fund account
  • Sale account
  • Profit & loss account
Under the diminishing balance method, depreciation is calculated on:
  • Scrap value
  • On original value
  • On book value
  • None of them
An additional purchase of Rs. 2000 was made for a machine on 10th October. Under straight line method, under Income tax Act, depreciation __________.
  •  will be done for half of the year
  • will be done from the beginning of the year
  • Both a & b
  • None of the above
Under the diminishing balance method depreciation:
  • Increases every year.
  • Decreases every year.
  • Remain constant every year.
  • None of them.
The economic factors causing depreciation is/are:
  • Time factor
  • Obsolescence and inadequacy
  • Wear and tear
  • Money valuation
Under the fixed installment method of providing depreciation it is calculated on
  • Original cost
  • On balance amount
  • On scrap value
  • None of them
Process of becoming out of date or obsolete is termed as_____________.
  • Physical deterioration
  • Depletion
  • Obsolescence
  • Amortization
Depreciation does not depend on fluctuations as:
  • Market value of asset
  • Cost of price of asset
  • Scrap value of asset
  • None of these
The Amount changed to deprecation goes on declining in ______________.
  • Depreciation fixed method
  • Annuity method
  • Written-down value method
  • Straight line depreciation method
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 the given options
In which depreciation method Depreciation remains constant?
  • Reducing balance method
  • Balance sheet
  • Depreciation method
  • None of these
Which of the following is the main cause of depreciation?
  • Fall in the market value of money
  • Fall in the market value of an asset
  • Physical wear and tear
  • None of the above
The estimated value of an asset after the expiry of its useful life is called as _______________.
  • Written Down value
  • Residual Value (Right Answer)
  • Accumulated Depreciation
  • Sales value
Depreciation is based on _________________.
  • Economic life of asset
  • Declared life of asset by supplier
  • Normal life of asset
  • None of these
Which of the following asset is NOT depreciated?
  • Factory Buildings
  • Office Equipment
  • Plant & Machinery
  • Land
On a worksheet, the adjusting entry to account for depreciation of equipment consists of __________.
  • Debit to Depreciation Expense and a credit to Equipment
  • Debit to Depreciation Expense and a credit to Accumulated Depreciation
  • Debit to Equipment and a credit to Accumulated Depreciation
  • Debit to Accumulated Depreciation and a credit to Equipment
Under straight line method, depreciation is calculated on:
  • Written Down Value
  • Salvage Value
  • Original Cost
  • 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.
  • Rs. 5,00,000
  • Rs. 4,60,000
  • Rs. 4,23,000
  • Rs. 5,52,000
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 :
  • Rs. 5,000
  • Rs. 5,600
  • Rs. 6,000
  • None 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:
  • 12,250
  • 10,000
  • 17,750
  • 12,545
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:
  • 8%
  • 9%
  • 10%
  • None of the above
Which of the following is not a typical cash flow related to equipment purchase and replacement decisions?
  • Increased operating costs
  • Overhaul of equipment
  • Salvage value of equipment when project is complete
  • Depreciation expense
The WDV of machine is Rs. 72,900, rate of depreciation @ 10%, period 3 years. Calculate the original cost of machinery.
  • 72,900
  • 80,000
  • 1,20,000
  • 1,00,000
The value of a fixed asset after deducting depreciation is known as its:
  • Book value
  • Market Value
  • Face Value
  • Realisable value
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:
  • Rs. 5,000
  • Rs. 6,000
  • Rs. 5,600
  • Rs. 6,200
Which of the following is/are cause for providing depreciation?
  • Physical wear and tear resulting from use
  • Physical deterioration resulting from atmospheric exposure
  • Passage of time
  • All of the above
Amortization applies to ________________.
  • Current Assets
  • Wasting Assets
  • Intangible Assets
  • Non - Current Assets
Depreciation is the fall in the ____________ of a fixed asset through physical wear and tear due to use or passage of time or from any other cause.
  • Quality
  • Value
  • Either (A) or (B)
  • None of the above
Which of the following is/are not the important characteristic of depreciation?
  • Total depreciation can exceed its depreciable value or original cost
  • Depreciation is calculated in respect of fixed assets only
  • Depreciation is always computed in a systematic and rational manner
  • All of the above
Fundamental objective of depreciation is/are ____________________.
  • To maintain the nominal capital invested in fixed assets
  • To allocate the expired portion of the cost of fixed assets over a number of accounting periods.
  • Both (A) & (B)
  • None of the above
Depreciation Accounting has been defined by the ________ as " a system of accounting which aims to distribute the cost or other basic value of tangible capital assets less salvage (if any) over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation and not of valuation".
  • The Institute of Chartered Accountants of England
  • The Institute of Chartered Accountants of India
  • American Institute of Certified Public Accountants
  • The Institute of Chartered Accountants of Pakistan
0:0:1


Answered Not Answered Not Visited Correct : 0 Incorrect : 0

Practice Class 11 Commerce Accountancy Quiz Questions and Answers