CBSE Questions for Class 11 Commerce Applied Mathematics Basics Of Financial Mathematics Quiz 11 - MCQExams.com

50,000 equity shares of Rs. 10 each and its Current price is Rs.45 each.The profit after tax for the year is Rs. 9,60,000. 
Calculate cost of capital based on price Earning method.
  • 42.67
  • 43.67
  • 40.67
  • 40.00
Depreciation is a non-cash expenses.
  • True
  • False
Depreciation is the _________ in the value of fixed assets due to its wear and tear.
  • Increase
  • Expansion
  • Addition
  • Reduction
Gradual and permanent decrease in the value of an asset is known as _________.
  • Loss
  • Profit
  • Depreciation
  • Scrap
Depreciation arises because of _____________.
  • wear and tear
  • inflation
  • fall in the value of asset
  • profit
Depreciation does not depends on ___________.
  • total cost of acquisition
  • scrap value
  • market price
  • total estimated life
A change in depreciation method under AS 6 is treated as __
  • Change in accounting policy
  • Change in accounting estimates
  • Prior period adjustment
  • Departure from AS 6
Depreciation accounting is a process of ___________.
  • asset valuation
  • allocation of market value of fixed asset over its useful life
  • allocation of depreciation cost of tangible fixed assets over its useful life
  • allocation of depreciable cost of wasting assets over its useful life
Allocating the cost of a fixed asset over its useful life is called __________.
  • amortization
  • depreciation
  • obsolescence
  • disposal
Which of these statements is true about depreciation.
  • It is a non-deductible expense
  • It is an appropriation of profit
  • It is a non - cash expense
  • It is a process of valuation
Depreciation is a process of ___________.
  • valuation of fixed assets
  • spreading of cost of a fixed asset over its working life
  • provision of fund for replacement of the asset
  • all the three
____________ deals with Depreciation Accounting.
  • AS-$$6$$
  • AS-$$7$$
  • AS-$$8$$
  • AS-$$2$$
Depreciation accounting follow ___________ principle.
  • matching cost
  • historical cost method
  • revenue recognizing
  • going concern concept
Suppose for the principal $$P$$, rate $$R\%$$ and time $$T$$ years the simple interest is $$S$$ and compound interest is $$C$$. Consider the possibilities :
(i) $$C > S$$  (ii) $$C = S$$ (iii) $$C < S$$

Which of the following options hold?
  • Only (i) is correct.
  • Either (i) or (ii) is correct
  • Either (ii) or (iii) is correct
  • Only (iii) is correct.
Depreciation is a ___________.
  • Non-recurring expenses
  • Non-cash expense
  • Non-allowable expense
  • Not an accounting expense
Obsolescence of a depreciable asset may be caused by
I. Technological changes
II. Improvement in the production method
III. Legal or other restrictions
  • Only (I)
  • Both (I) and (II)
  • All (I), (II), (III) 
  • Only (III)
The depreciation is an expense accruing ______________.
  • from the consumption of some readily consumable assets
  • from the use of fixed assets
  • from the use of various services
  • from the use of current asset
The value of a car depreciates every year at the rate of 10% on its value at the beginning of the year. If the present value of the car is Rs 52,488 its worth four years ago was
  • $$Rs\ 68.232$$
  • $$Rs\ 68.234$$
  • $$Rs\ 69.862$$
  • $$Rs\ 80,000$$
Which of the following is correct? Depreciable assets are those assets which:
(1) Are expected to be used for more than one accounting period.
(2) Have a limited useful life
(3) Are held for the purpose of re-sale
(4) None of these
  • 1 and 2
  • 2 and 3
  • 2 and 4
  • 1 and 3
The VDIS-Voluntary Disclosure of Income Scheme was the brainchild of ______________.
  • P.Chidambaram
  • Ram Jethmalani
  • Atal Behari Vajpayee
  • Sonia Gandhi
Allocation of the cost of a fixed assets over its useful life is called ___________.
  • Allocation
  • Apportionment
  • Depreciation
  • Depletion
The main purpose of depreciation accounting is to _____________.
  • charge the cost of asset
  • allocate the cost of the asset over its estimated useful life
  • provide for replacement of the asset on the expiry of is useful life
  • value the assets on the closing date of the year
Plant asset are depreciated over their useful lives. Which basic principle of accounting does this procedure reflect?
  • Historical cost.
  • Matching expenses with revenue.
  • Consistency.
  • Objectivity.
In a factory, the production of scooters rose to $$48400$$ from $$40000$$ in $$2$$ years. The rate of growth per annum is
  • $$20$$%
  • $$10$$%
  • $$30$$%
  • $$8$$%
The amount of annual instalment to depreciation funds is ______________.
  • A charge against profits
  • An appropriation of profits
  • May be charge or appropriation of profits
  • Neither a charge nor appropriation of profit
The compound interest on Rs. 5,000 for two years at 4% is
  • Rs. 400
  • Rs. 408
  • Rs. 420
  • Rs. 440
According to $$AS-6$$, 'Depreciable assets' are assets which __________.
  • Are expected to be used during more than one accounting period
  • Have a limited useful life
  • Are held by an enterprise for use in the production or supply of goods and services, for rental to others, or for administrative purposes and not for the purpose of sale in the ordinary course of business
  • All of the above
A farmer took a loan at 12% p.a. at S.I. After 4 years he settled the loan by paying Rs. 2,What was the principal amount?
  • Rs. 1,542
  • Rs. 1,600
  • Rs. 1,650
  • Rs. 1,550
Depreciation is generally provided on _______________.
  • Current Assets.
  • Fixed Assets.
  • Loans and Advances.
  • Fixed Liabilities.
The number of production of similar units expected to be obtained from the use of an asset by an enterprise is called as ______.
  • Unit Life
  • Useful Life
  • Production Life
  • Expected Life
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