MCQ on depreciation (Part-3 From Q-61 to 80)

 MCQ on depreciation (Part-3 From Q-61 to 80)

61. Provision is created by debiting :

(a) Profit and Loss Account

(b) None of these

(c) Profit and Loss Appropriation Account

(d) Trading Account

62. The cause of Depreciation is :

(a) Wear and tear

(b) Obsolescence

(c) All of these

(d) Usage of Asset

63. Depreciation is a process of :

(a) Allocation

(b) Valuation

(c) None of these

(d) Depletion

64. Under Reducing Balance Method, depreciation to be charged :

(a) Scrap Value

(b) None of these

(c) Real Value

(d) Original value

65. The depreciation charged on an asset will be credited to :

(a) Depreciation A/c

(b) Asset A/c

(c) Bank A/c

(d) Cash A/c

66. Every fixed asset loses its value due to use or other reasons. This decline in the value of asset is known as

(a) Amortization

(b) Provisions

(c) Depreciation

(d) Devaluation

67. Following are the causes of Depreciation except

(a) Wear and tear due to use or passage of time.

(b) normal factors

(c) Expiration of legal rights.

(d) Obsolescence.

68. Following are the causes of Depreciation except

(a) Natural resources

(b) Fixed asset

(c) Liabilities

(d) Intangible assets

69. An alternative term used for accumulated depreciation expenses?

(a) Provision for depreciation

(b) Cumulative depreciation

(c) Targeted depreciation

(d) Depletion

70. Depreciation charged under diminishing method

(a) Increase every year

(b) Decrease every year

(c) Increase in one year and decrease another year

(d) Same every year

71. Which of the following is not a type of reserve

(a) Provision for bad debt

(b) General reserve

(c) Workmen compensation fund

(d) Retained earnings

72. What is depreciation?

(a) Cost of using a fixed asset

(b) The value of asset

(c) Portion of a fixed assets cost consumed during the current accounting

(d) Cost of fixed asset’s repair

73. Depreciation helps in determining

(a) Accurate level of profit

(b) Increases the value of asset

(c) Revenue generation

(d) Increase the burden of tax

74. What is the rate of charging depreciation under diminishing method?

(a) 12% p.a.

(b) 15% p.a.

(c) 10% p.a.

(d) Not fixed

75. Under which depreciation method the amount of depreciation expenses remains same throughout the useful life of a fixed asset

(a) Straight line method

(b) Reducing balance method

(c) Number of units produced method

(d) Machine hours method

76. The main objective of depreciation is

(a) To show the previous profit

(b) To calculate net profit

(c) To reduce tax

(d) To satisfy the tax department

77. Depreciation is generated due to

(a) Increase in the value of liability

(b) Decrease in capital

(c) Wear and tear

(d) Decrease in the value of assets

78. What is the purpose of making a provision for depreciation in the accounts?

(a) To charge the cost of fixed assets against profits

(b) To show the current market value of fixed asset

(c) To make cash available to replace fixed assets

(d) To make a provision for repairs

79. According to straight line method of providing depreciation, the depreciation

(a) Remains constant

(b) Increase each year.

(c) Decrease each year

(d) None of them.

80. Total amount of depreciation of an asset cannot exceed its

(a) Depreciation value

(b) Scrap value

(c) Market value

(d) None of these