Depreciation Test 12

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Depreciation Test 12

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Question 1
1 / -0

For an asset owned for more than one year, the depreciation charge for the year calculated using the reducing-balance basis at the rate of 35% would be arrived at as follows:

A
35% x cost of the asset

B
35% x (cost of the asset - accumulated depreciation)

C
35% x accumulated depreciation

D
35% x (cost of the asset + accumulated depreciation)
Question 2
1 / -0

An additional purchase of Rs.2,00,000 was made for a machine on 01.12.2006. Under straight-line method, depreciation at the rate of 10% ________.

A
will be charged for half of the year

B
will be charged from the beginning of the year

C
Both a & b

D
None of the above
Question 3
1 / -0

In the Straight-line method of providing depreciation, depreciation _______.

A
increase every year

B
remain constant every year

C
decreases every year

D
None of them

Solution

Under straight line method of depreciation, the amount of depreciation remains constant because depreciation is provided at a fixed rate on the purchase price of the asset.
Question 4
1 / -0

Invariably in diminishing balance method ________.

A
Book value becomes zero

B
Book value never becomes zero

C
Book value is negative

D
Book value is infinite
Question 5
1 / -0

In diminishing balance method ________.

A
amount of depreciation value keeps on decreasing over the passage of time

B
amount of depreciation value remains same over the passage of time

C
calculation of rate of depreciation is early

D
depreciation is charged on the original cost of asset
Question 6
1 / -0

Under the diminishing balance method, depreciation _______.

A
increases every year

B
decreases every year

C
remains constant every year

D
None of them

Solution

In diminishing balance method, depreciation is calculated on book value of the asset at the start of the year instead of principle amount with fixed percentage. In this, the percentage is same but depreciation amount gradually decreases as it is done on book value.
Therefore, B is the correct option.
Question 7
1 / -0

A boiler was purchased by a company for Rs20 lakh after 2 years its cost came down to Rs10 lakh at present its cost is Rs15 lakh. How will we calculated the depreciation for this asset?

A
It wilt be calculated on the basis of its original cost 20 lakh rupees.

B
It will be calculated on he basis of 15 lakh rupees worth cost

C
It will be calculated on the basis of Rs. 10 lakh cost.

D
It will be calculated by taking the average of all three costs.
Question 8
1 / -0

The Amount changed to deprecation goes on declining in ______________.

A
Depreciation fixed method

B
Annuity method

C
Written-down value method

D
Straight line depreciation method

Solution

Written-down value can be calculated by a method of depreciation that is sometimes called the diminishing balance method. This accounting technique reduces the value of an asset by a set percentage each year. When selling the asset, the book value is used to help determine the minimum value for which it will be sold.
Question 9
1 / -0

The amount charged to deprecation goes on declining in ________.

A
Depreciation fund method

B
Annuity method

C
Written-down value method

D
None of these
Question 10
1 / -0

In which depreciation method Depreciation remains constant?

A
Reducing balance method

B
Balance sheet

C
Depreciation method

D
None of these

Solution

Reducing balance depreciation – also known as declining balance depreciation or diminishing balance depreciation – is a method of calculating depreciation whereby an asset is expenses at a set percentage.

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Re-Attempt Weekly Quiz Competition

Depreciation Test 12

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Depreciation Test 12

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Question 1

35% x cost of the asset

35% x (cost of the asset - accumulated depreciation)

35% x accumulated depreciation

35% x (cost of the asset + accumulated depreciation)

Question 2

will be charged for half of the year

will be charged from the beginning of the year

Both a & b

None of the above

Question 3

increase every year

remain constant every year

decreases every year

None of them

Solution

Question 4

Book value becomes zero

Book value never becomes zero

Book value is negative

Book value is infinite

Question 5

amount of depreciation value keeps on decreasing over the passage of time

amount of depreciation value remains same over the passage of time

calculation of rate of depreciation is early

depreciation is charged on the original cost of asset

Question 6

increases every year

decreases every year

remains constant every year

None of them

Solution

Question 7

It wilt be calculated on the basis of its original cost 20 lakh rupees.

It will be calculated on he basis of 15 lakh rupees worth cost

It will be calculated on the basis of Rs. 10 lakh cost.

It will be calculated by taking the average of all three costs.

Question 8

Depreciation fixed method

Annuity method

Written-down value method

Straight line depreciation method

Solution

Question 9

Depreciation fund method

Annuity method

Written-down value method

None of these

Question 10

Reducing balance method

Balance sheet

Depreciation method

None of these

Solution

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