MCQ on depreciation (Part-3 From Q-81 to 100)

 MCQ on depreciation (Part-4 From Q-81 to 100)

 

81. According to fixed instalment method, the depreciation is calculated on

(a) Balance amount

(b) Original cost

(c) Scrap value

(d) None of them

82. Salvage value means

(a) Definite sale price of the asset

(b) Cash to be received when life of the asset ends

(c) Cash to be paid when asset is disposed off

(d) Estimated disposal value

83. Depreciation is calculated under diminishing balance method, based on

(a) Original value

(b) Book value

(c) Scrap value

(d) None of them

84. Depreciation amount charged on a machinery will be debited to:

(a) Repair account

(b) Cash account

(c) Depreciation account

(d) Machinery account

85. In accounting, becoming out of date or obsolete is known as

(a) Amortization

(b) Obsolescence

(c) Depletion

(d) Physical deterioration

86. Depletion method is suitable for

(a) Land

(b) Mines

(c) Office equipment

(d) None of these

87. Scrape value is also called

(a) Salvage value

(b) Residual value

(c) Both of these

(d) None of these

88. Which of the following method is normally used for income tax purpose

(a) Diminishing balance method

(b) Fixed installment method

(c) Both

(d) None of these

89. The asset is never fully depreciated under

(a) Equal installment method

(b) Sinking fund method

(c)Diminishing balance method

(d) None of these

90. Which of the following is kind of depreciation

(a) Amortization

(b) Depletion

(c) Both of these

(d) None of these

 

91. Depletion method of depreciation is normally applied in case of __ assets.

(a) intangible

(b) tangible

(c) wasting

(d) current

92.  __ method of depreciation takes into account the element of interest on capital outlay and seeks to write off the value of the asset as well as the interest lost over the life of the asset:

(a) Sum of year’s digits .

(b) Annuity

(c) Sinking Fund

(d) Straight line

93. Vijay Traders purchased Car on 1.4.08 for ~ 3,00,000. They are charging depreciation on written Down Value method. On 31.3.09 they sold the Car for ~ 1,65,000 and incurred a loss of ~ 75,000. The rate of depreciation p.a. is:

(a) 10%

(b) 15%

(c) 20%

(d) 25%

94. Depreciation is to be calculated from the date of:

(a) Asset put to use

(b) Purchase order of asset

(c) Receipt of asset at business premise

(d) Invoice of Assets.

95. According to the Income Tax Act, which method of Charging depreciation is provided?

(a) Reducing Balance Method

(b) Sinking Fund

(c) Annuity Method

(d) Straight Line Method.

96. Which method of depreciation is effective if repairs and maintenance cost of an asset increases as it grows old:

(a) Straight Line Method

(b) Sinking Fund

(c) Annuity

(d) Reducing Balance.

97. In case of reducing balance method of charging depreciation, depreciation is charged on the:

(a) Original Cost

(b) Original Cost less Scrap value

(c) Market Value

(d) Written Down Value

98. Estimated useful life of a machinery is 5 yrs. Depreciation written off in second year under sum of years digit method would be:

(a) 4/15

(b) 3115

(c) 2115

(d) 1/15

99. Where a machine produces products of uniform size, of depreciation is applied:-

(a) machine hour method

(b) sinking Fund method

(c) annuity method

(d) production units.

100. A depreciable asset may ‘suffer obsolescence due to:-

 (a) Passage of time

 (b) Wear and tear

(c) Technological Changes

(d) None of the above.