Accounting Mcqs

Page No. 48

Depreciation is calculated on the____________?


aCost price of asset


bMarket price


cCost+ Transport+ Installation expenses


dCost or market values whichever is less



Which of the following statements is correct about Depreciation?


aWhich of the following statements is correct about Depreciation?


bDepreciation is a charge against profit


cDepreciation is provided in the books only when there is profit


dDepreciation is an appropriation of profit



In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?


aStraight-line method


bWritten down value method


cUnits-of-production method


dSum-of-the years‘-digits method


View Answer Straight-line method

Which of the following factors are primarily considered to determine the economic life of an asset?


aPassage of time, asset usage, and obsolescence


bTax regulations and SEBI guidelines


cTax regulations and asset usage


dSEBI guidelines and Asset usage



The accounting process of gradually converting the unexpired cost of fixed assets into expenses over a series of accounting periods is_________?


aDepreciation


bPhysical deterioration of the asset


cDecrease in market value of the asset


dValuation of an asset at a point of time


View Answer Depreciation

Which of the following statements is true with regard to written down value method of depreciation? 0 i. The rate at which the asset is written off reduces year after year ii. The amount of depreciation provided reduces from year to year iii. The rate of depreciation as well as the amount of depreciation reduce year after year iv. The value of the asset gets reduced to zero over a period of time


aOnly (i) above


bOnly (ii) above


cBoth (i) and (ii) above


d(i),(ii) and (iii) above


View Answer Only (ii) above

The portion of the acquisition cost of the asset yet to be allocated is known as___________?


aWritten down value


bAccumulated value


cSalvage value


dResidual Value


View Answer Written down value

Depreciation is a process of____________?


aValuation


b Valuation and allocation


cAllocation


dAppropriation


View Answer Allocation

The main objective of providing depreciation is to?


aCalculate the true profit


bShow the true financial position in the Balance Sheet


cProvide funds for replacement of fixed assets


dBoth A. and B. above



Which of the following statements best describes the purpose of depreciation?


aRegular reduction of asset value to correspond to changes in market value as the asset ages


bRegular reduction of asset value to correspond to changes in market value as the asset ages


cAllocation of cost in a manner that will ensure that Plant and Equipment items are not carried on the Balance Sheet in excess of net realizable value


dAllocation of the cost of an asset to the periods in which services are received from the asset



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