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CBSE Questions for Class 11 Commerce Applied Mathematics Basics Of Financial Mathematics Quiz 12 - MCQExams.com
CBSE
Class 11 Commerce Applied Mathematics
Basics Of Financial Mathematics
Quiz 12
Depreciation is a process of ______________.
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0%
Valuation.
0%
Allocation.
0%
Reduction.
0%
Appreciation.
Explanation
solution:
Depreciation is an accounting process by which a company allocates an asset's cost throughout its useful life
hence the correct opt: B
Which of the following statement is incorrect?
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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.
Explanation
Depreciation
. The value of fixed assets reduce after year because of usage and passage of time.
Therefore, decrease
in
their value is considered as an expense or
loss
incurred
in
earning revenue and like other expenses or
losses
, is
charged
to the
Profit and Loss Account
.
The reason
for
using
depreciation
is to
match
a portion of
the cost
of a
fixed asset
to the
revenue
that it generates; this is mandated under the
matching
principle, where you record
revenues
with their associated expenses in the same reporting period in order to give a complete picture of the results of a
revenue
Depreciation
is an accounting method of
allocating
the
cost
of a tangible or physical
asset over its useful life
or
life
expectancy.
Depreciation is a ________ shrinkage in the book value of a fixed asset.
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0%
Permanent
0%
Continuous
0%
Gradual
0%
Any of the above
Explanation
solution:
Depreciation is defined as “a permanent, continuing and gradual shrinkage in the book value of a fixed asset due to use, wear and tear.
hence any of the above is right
hence the correct option: D
On which of the following asset depreciation cannot be provided?
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0%
Building.
0%
Land.
0%
Mines.
0%
Loose tools.
Explanation
solution:
The land asset is not depreciated, because it is considered to have an infinite useful life.
During this useful life, they are depreciated, which reduces their cost to what they are supposed to be worth at the end of their useful lives
or we can say
Depreciation means decrease in value of property through wear, deterioration or obsolescence. In that sense, land cannot depreciate. Depreciation is allowable only on the value of superstructure on the land and not on the value of land.
hence the correct option B
Depreciation is a process of allocation of the cost of fixed asset.
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0%
True
0%
False
Explanation
In accounting, the term depreciation refers to the allocation of cost of a tangible asset to expense to the periods in which the asset is expected to be used to obtain the economic benefit.
Hence, the given statement is True.
Asset that has a limited useful life are termed as:
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0%
Limited assets
0%
Depreciation assets
0%
Unlimited asset
0%
None of these
Explanation
The assets which have a limited useful life are termed as Depreciable assets. The assets which are held by a business for the production and supply of goods and services, expected to be used for more than an accounting year and have a limited useful life are known as Depreciable Assets.
Hence, Option (B) is the correct answer.
Which of the term is used to write off in reference to tangible fixed assets?
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0%
Depreciation
0%
Depletion
0%
Amortization
0%
Both (b) and (c)
Explanation
Depreciation is the process of allocating a tangible asset's cost over the course of its useful life.
Hence, the correct option is A.
Depreciation is based on _________________.
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0%
Economic life of asset
0%
Declared life of asset by supplier
0%
Normal life of asset
0%
None of these
Explanation
Economic Life
and
Depreciation
Depreciation
refers to the rate at which an
asset
deteriorates over time. The
depreciation
rate is used to estimate the effects of aging, daily use, and wear and tear on the
asset
. When related to technology,
depreciation
can also include the risk of obsolescence.
Depreciation is __________ of an asset.
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0%
Valuation
0%
Allocation
0%
Sale value
0%
All of the above
Explanation
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 Depreciation. Depreciation is any method of allocating such net cost to those periods in which the organization is expected to benefit from the use of the asset.
Thus, the correct option is B.
Which of the following asset is NOT depreciated?
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0%
Factory Buildings
0%
Office Equipment
0%
Plant & Machinery
0%
Land
Explanation
Land is not depreciated
because
land
is assumed to have an unlimited useful life. Other long-lived
assets
such as
land
improvements, buildings, furnishings, equipment, etc. have limited useful lives. Therefore, the costs of those
assets
must be allocated to those limited accounting periods.
The economic factors causing depreciation is/are:
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0%
Time factor
0%
Obsolescence and inadequacy
0%
Wear and tear
0%
Money valuation
Explanation
There are four cause due to which depreciation takes place:
Physical Deterioration
Economic Factors
Time Factors
Depletion
Economic factors arises due to obsolescence and inadequacy. Obsolescence means the process of becoming obsolete and out of date. New model and new technology may make the asset obsolete even though it is in good physical condition. Inadequacy refers to the stoppage of asset’s usage because of growth and changes in the size of the firm
Hence, Option (B) is the correct answer.
A decrease in value of fixed asset due to age, wear and tear ___________.
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0%
Appreciation
0%
Written down value
0%
Depreciation
0%
Accumulated depreciation
Explanation
Depreciation is a non-cash expense that reduces the value of an asset over time.
Assets depreciate for below mentioned reasons:
Wear and tear
Obsolescence
Keeping idle for prolonged
Depletion
Process of becoming out of date or obsolete is termed as_____________.
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0%
Physical deterioration
0%
Depletion
0%
Obsolescence
0%
Amortization
Explanation
The word "
obsolete
" refers to assets of different kinds, and the term, in general, has several meanings. "
Obsolete
" as an adjective
can
refer to something that
is
: No longer used, like a buggy whip. Out of date or old-fashioned, like a pair of bell-bottomed trousers from the 1970s.
The S.I. accrued on an amount of Rs. $$25,000$$ at the end of three years is Rs. $$7,500$$. What would be the C.I. accrued on the same amount at the same rate in the same period?
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0%
$$7,750$$
0%
$$8,275$$
0%
$$8,500$$
0%
$$8,250$$
0%
None of these
Explanation
Apply the formula for simple interest
$$7500=\dfrac{25000\times R\times3}{100}$$
$$\implies R=\dfrac{7500}{250\times3}=10\%$$
Interest for the $$1$$st year$$=\dfrac{25000\times10\times1}{100}$$
$$=2500$$
Amount After the $$1$$st year$$=25000+$$$$2500$$
$$=27500$$
Interest for the $$2$$nd year$$=\dfrac{27500\times10\times1}{100}$$
$$=2750$$
Amount After the $$2$$nd year$$=27500+$$$$2750$$
$$=30250$$
Interest for the $$3$$rd year$$=\dfrac{30250\times10\times1}{100}$$
$$=3025$$
Amount After the $$3$$rd year$$=30250+$$$$3025$$
$$=33275$$
$$\therefore$$Compound Interest(CI)$$=33275-$$$$25000$$
$$=Rs.8275$$
The difference in compound interest and simple interest for one year for Rs. $$1,000$$ at $$10\%$$ p.a. is?
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0%
$$10$$
0%
$$5$$
0%
$$0$$
0%
None of the above
Explanation
$$SI = \cfrac{1000 \times 10 \times 1}{100} = ₹100$$
Compound interest for the first year
$$= \cfrac{1000 \times 10 \times 1}{100} = ₹100$$
$$CI - SI =$$ $$ 100-100 = 0$$
________ is not a Direct Tax.
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0%
Income Tax
0%
Wealth Tax
0%
Gift Tax
0%
Entertainment Tax
Explanation
Income tax, wealth tax and gift tax are all direct taxes. Entertainment tax is an indirect tax. It is a tax on any kind of entertainment activities. It might include cinema, theaters etc. Entertainment falls in List 2 of the Seventh Schedule of the Constitution of India and is exclusively reserved as a revenue source for the state governments.
If the interest on a certain sum for first year at $$5\%$$ p.a. compounded is Rs. $$25$$ then, the total interest at the end of second year will be.
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0%
$$51.25$$
0%
$$50$$
0%
$$26.25$$
0%
None of the above
Explanation
$$I=25$$
$$R=5%$$
$$SI=\cfrac{P\times R \times T }{100}$$
$$ 25 = \cfrac{P \times 5\times 1}{100}$$
$$ P= \cfrac{25 \times 100}{5} = ₹500$$
Amount after first year $$= 500 + 25 = 525$$
Interest for second year $$= \cfrac{525 \times 5\times 1}{100} = 26.25$$
Total interest $$= 25+26.25$$
$$= Rs51.25$$
An annuity is?
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0%
A fixed sum
0%
Paid at regular intervals
0%
Under certain stated conditions
0%
All of the above
Explanation
An annuity is
$$(1)$$A fixed sum
$$(2)$$ Paid at regular intervals
$$(3)$$Under certain stated conditions.
Choose the correct answer from the alternatives given.
A sum of money doubles itself at compound interest in 15 years. In how many years it will become eight times?
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0%
30
0%
45
0%
50
0%
60
Explanation
Always CI increases exponentially
Given,
The sum becomes 2 times in 15 years
i.e, 2 times -------> 15 years
2^3(8 years)-----> $$ 15\times 3 $$ years
So answer is 45 years
Mrs. S deposited Rs. $$1,00,000$$ in a nationalized bank for $$3$$ years. If the rate of interest is $$7\%$$ p.a., Interest is compounded annually. Calculate the amount at the end of third year (i.e., Principal $$+$$ compound interest)
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0%
$$1,22,504.03$$
0%
$$1,02,504.30$$
0%
$$1,22,505.30$$
0%
$$1,22,405.30$$
Explanation
Interest for the$$1^{ st }$$ year $$= Rs.\dfrac { 100000\times 1\times 7 }{ 100 } =Rs. 7000$$
Amount after the$$1^{ st }$$ year $$= Rs. 100000 + Rs.7000= Rs. 107000$$
Interest for the $$2^{nd}$$ year $$= Rs.\dfrac{107000\times 1\times 7}{100} = Rs.7490$$
Amount after the $$2^{nd}$$ year $$= Rs. 107000 + Rs. 7490 = Rs. 114490$$
Interest for the$$3^{ rd }$$ year $$= Rs. \dfrac { 114490\times 1\times 7 }{ 100 } = Rs. 8014.3$$
$$\therefore$$ Amount at the end of the $$3^{rd}$$ year $$= Rs. 114490+ Rs. 8014.3= Rs. 122504.30$$
If $$P=Rs. 1,000$$, R$$=5\%$$, p.a., $$n=4$$; What is amount and CI?
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0%
Rs. $$1,215.50$$ & $$215.50$$
0%
Rs. $$1,125$$ & $$125$$
0%
Rs. $$2,115$$ & $$115$$
0%
None of the above
Explanation
$$P=Rs$$ $$1000$$, $$R=5\%$$ $$p.a.$$, $$n=4$$
Interest for the $$1^{st}$$ year $$= Rs$$ $$\cfrac{1000\times 5\times 1}{100}= Rs$$ $$50$$
Amount after $$1^{st}$$ year $$= Rs$$ $$1000+ Rs$$ $$50=Rs$$ $$1050$$
Interest for the $$2^{nd}$$ year $$= Rs$$ $$\cfrac{1050\times 5\times 1}{100}= Rs$$ $$52.5$$
Amount after $$2^{nd}$$ year $$= Rs$$ $$1050+ Rs$$ $$52.5=Rs$$ $$1102.5$$
Interest for the $$3^{rd}$$ year $$= Rs$$ $$\cfrac{1102.5\times 5\times 1}{100}= Rs$$ $$55.125$$
Amount after $$3^{rd}$$ year $$= Rs$$ $$1102.5+ Rs$$ $$55.125=Rs$$ $$1157.625$$
Interest for the $$4^{th}$$ year $$= Rs$$ $$\cfrac{1157.625\times 5\times 1}{100}= Rs$$ $$57.88125$$
Amount after $$1^{st}$$ year $$= Rs$$ $$1157.625+ Rs$$ $$57.88125=Rs$$ $$1215.50$$
$$\therefore$$ Compound Interest $$=Rs$$ $$1215.50-Rs$$ $$1000=Rs$$ $$215.50$$
Find the compound interest for Rs. $$1,000$$ for $$4$$ years at $$5\%$$ p.a. When the interest is compounded annually.
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0%
$$220$$
0%
$$218$$
0%
$$215$$
0%
$$250$$
Explanation
Interest for first year $$ =\cfrac{1000 \times 5 \times 1}{100} = ₹50$$
Amount after first year $$= 1000+50=₹1050$$
Interest for second year $$= \cfrac{1050 \times 5 \times 1}{100} = ₹52.5$$
Amount after
second
year $$= 1050+52.5=₹1102.5$$
Interest for third year $$= \cfrac{1102.5 \times 5 \times 1}{100} = ₹55.125$$
Amount after third year $$= 1102.5+55.125=₹1157.625$$
Interest for fourth year $$= \cfrac{1157.625 \times 5 \times 1}{100} = ₹57.88125$$
Amount after fourth year $$= 1157.625+57.88125=₹1215.50625$$
Compound interest $$=1215.50625 - 1000 = 215.50625 = ₹215$$
A sum of Rs. $$1,200$$ becomes Rs. $$1,323$$ in $$2$$ years at compound interest compounded annually. Find the rate per cent.
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0%
$$8\%$$
0%
$$7\%$$
0%
$$6\%$$
0%
$$5\%$$
Explanation
Let r% be rate per annum, then,
$$1323 = 1200(1 + \cfrac{r}{100})^2$$
$$\implies \cfrac{1323}{1200} = (1+\cfrac{r}{100})^2$$
$$\implies \sqrt{\cfrac{1323}{1200}} = (1+\cfrac{r}{100})$$
$$\implies 1.05 = (1+\cfrac{r}{100})$$
$$\implies \cfrac{r}{100} = 1.05 - 1 = 0.05$$
$$\implies r= 100 \times 0.05 = 5$$%
Tanishka deposited Rs. $$50,000$$ in a bank for two years with the interest rate of $$5.5\%$$ p.a. How much interest would she earn?
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0%
$$6,000$$
0%
$$5,250$$
0%
$$55,500$$
0%
$$5,500$$
Explanation
$$ Interest = \cfrac{ 50000 \times 2 \times 5.5 }{100} = 5500$$
In case of compound interest, interest also earns interest.
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0%
True
0%
False
Explanation
Obviously, it is true that in case of compound interest, interest also earns interest.
National income differs from net national product at market price by the amount of ____________.
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0%
current transfers from the rest of the world
0%
net indirect taxes
0%
national debt interest
0%
it does not differ
Which of the following is not an effect of simplification of procedural aspects in Taxation?
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0%
Improvement in tax compliance
0%
Increased revenue generation for the Government
0%
More work for Tax Authorities and Taxpayers
0%
All of the above
Which of the following is not part of the Taxation Reforms in 1991?
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0%
General policy for introduction of State-level VAT
0%
Rationalisation of Excise Duties towards CENVAT concept
0%
Reduction in the peak rate of Customs Duties
0%
Increase in Customs, Excise and Sales Tax Rates
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.
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0%
Quality
0%
Value
0%
Either (A) or (B)
0%
None of the above
Explanation
Physical wear and tear
resulting from
use
: It is the
cause
of charging
depreciation
for the
assets
which lose their
value
from the constant
use
such as
fixed assets
such as building; plant, machinery etc. get
worn
out and
torn
out
due
to the regular
use
.
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".
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0%
The Institute of Chartered Accountants of England
0%
The Institute of Chartered Accountants of India
0%
American Institute of Certified Public Accountants
0%
The Institute of Chartered Accountants of Pakistan
Explanation
Accounting
Standards Codification 360-10-35-4
defines depreciation
.
depreciation
expense ceases in as much as the full cost of the asset
has been
recorded to expense. Committee of the
American Institute
of
Certified Public Accountants
.
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