CBSE Questions for Class 11 Commerce Applied Mathematics Basics Of Financial Mathematics Quiz 13 - MCQExams.com

__________ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined."
  • 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
Suppose a shopkeepers buys inputs worth $$Rs. 2,00,000$$ and his sales are worth $$Rs. 4,00,000$$ in a month. The input tax rate is $$4$$% and output tax rate is $$10$$%. What is value added tax here after set off of input tax credit?
  • $$Rs. 32,000$$
  • $$Rs. 8000$$
  • $$Rs. 4,000$$
  • $$Rs. 20,000$$
At present, the marginal rate of income tax (i.e., tax for the highest slab) is _______.
  • $$10$$%
  • $$20$$%
  • $$30$$%
  • $$40$$%
Custom duties are levied on _______.
  • incomes of the individual
  • production of goods
  • export and import of goods
  • incomes of the corporate
Income Tax in India was introduced in the year:
  • 1860
  • 1960
  • 1880
  • 1947
In $$2011-12$$ direct taxes are around ______% of GDP.
  • $$5.48$$
  • $$15.26$$
  • $$12.83$$
  • $$7.75$$
If final good attracts an excise duty of Rs. 8000 and Rs. 1000 has already been paid on inputs then the firm will pay the Rs. 7,000 towards excise duty. It is paying tax according to________.
  • VAT
  • CENVAT
  • MODVAT
  • None of the above
If a firm produces goods with Rs. 10,000 and the cost of raw materials is Rs. 10,000 and the firm will pay tax on Rs.It is paying tax according to:
  • VAT
  • CENVAT
  • MODVAT
  • None of the above
Which one of the following sources of Central revenue belongs to the category of Indirect taxes?
  • Corporation tax
  • Customs
  • Wealth tax
  • Interest Receipts
Which of the following statements is correct?
  • Income tax was abolished in India in $$1991$$.
  • Gift tax was abolished in India in $$1998$$, but income tax on gift (received) without adequate consideration was partially reintroduced in April $$2004$$.
  • No states have adopted VAT system of indirect taxation.
  • Estate duty was abolished in $$1995$$.
Transfer payment includes:
  • Old age pensioin
  • Tax payments
  • Consumer's debt interest
  • All of the above
Depreciation accounting is _______________.
  • A process of valuation of fixed asset
  • A process of allocation of the cost of fixed asset
  • A method of providing funds for replacement
  • A method of comparison
Useful life of a depreciation asset should be estimated after considering:
  • Expected Physical wear & tear
  • Obsolescence
  • Legal or other limits on the use of the asset
  • Historical cost
  • (A), (B), & (C)
With reference to manufacturing account, which of the following is not true:
  • Depreciation on Factory Plants Machinery appears
  • Depreciation on Factory Land & Building appears
  • Depreciation on Office Land & Building appears
  • None of these
Depreciable 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 administrative purposes and not for the purpose of sale in the ordinary course of business.
  • All of above
Useful life of fixed asset is _________.
  • The period over which a depreciable asset expected to be used by the enterprises, or
  • The number of production or similar units expected to be obtained from the use of the asset by the enterprise
  • (A) or (B)
  • None of the above
The objectives of providing depreciation include:
  • To ascertain in true financial performannce
  • To Ascertain true financial position
  • To ascertain true cost of production
  • To comply with legal requirements
  • To accumulate funds for replacement of assets
  • All of above
Depreciation is related to:
  • Current Assets
  • Investment
  • All Fixed Assets
  • All Fixed Tangible Assets
When the plant and machinery are in very good condition, depreciation:
  • Will not be provided
  • Is to be provided as usual
  • May or may not be provided
  • None of the above
If the Market price of machinery is more than the book value then ________________.
  • Depreciation need not be provided
  • Depreciation will be provided
  • Depreciation will be provided but less
  • None of the above
Which of the following statement is true?
  • Depreciation provision is of the discretion of the management
  • Depreciation is a charge against profit
  • Depreciation is provided only when there is profit
  • Depreciation is an appropriation of profit
A sum of money becomes $$\text{Rs. }6,500$$ after $$3$$ years and $$\text{Rs. }10,562.50$$ after $$6$$ years on compound interest. Find the initial amount of the money.
  • $$\text{Rs. }4,000$$
  • $$\text{Rs. }4,500$$
  • $$\text{Rs. }4,800$$
  • None of these
  • Both Assertion and Reason are correct and Reason is the correct explanation for Assertion
  • Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion
  • Assertion is correct but Reason is incorrect
  • Assertion is incorrect but Reason is correct.
The profit on depreciation policy is transferred to :
  • Profit and loss A/c
  • Asset A/c
  • Depreciation reserve A/c
  • None of the above
John borrowed Rs.1,00,000 at 10 percent per annum simple interest. He immediately lent the whole sum at 10 percent per annum compound interest. At the end of 2 years, he would gain -
  • Rs.1,000
  • Rs.1,800
  • Rs.2,000
  • Rs.100.
Depreciation is the process of:
  • Asset Valuation
  • Verification of assets
  • Allocation of cost of assets to the period of its life
  • Decreasing the value of asset
Which of the following is correct?
  • Depreciation is not the process of valuation of assets- it is the process of allocation of costs to the period of its economic life
  • If cost of machinery is more than book value there is no need of providing depreciation
  • If plant and machinery are in good condition, through repairs etc., there is no need to provide depreciation
  • All the above
A sum of money invested at 14$$\%$$ per annum amounted to Rs. 10400 in 5 years. Calculate the principal.
  • $$Rs.\ 6067.34$$
  • $$Rs.\ 6278.24$$
  • $$Rs.\ 6384.62$$
  • $$Rs.\ 6117.65$$
The cost of a refrigerator is $$Rs. 9000$$. Its value depreciates at the rate of $$5\%$$ every year. The total depreciation in its value at the end of $$2$$ years $$877.5$$
  • True
  • False
A TV was bought at a price of Rs. 21,000. After one year the value of the TV was depreciated by 5%. (Depreciation means reduction of value due to use and age of the item). Find the value of the TV after one year.
  • 19,750
  • 17,950
  • 19,950
  • 19,000
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