Depreciation Provisions and Reserves Test

Result

Depreciation Provisions and Reserves Test - 45

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

Under the diminishing balance method, depreciation amount is a/an ________.

A
Payment

B
Receipt

C
Expenditure

D
None of these
Question 2
1 / -0

Some of the benefits you receive with depreciation are____________.

A
income tax saving

B
customs tax saving

C
sales tax saving

D
excise duty saving
Question 3
1 / -0

Asset that has a limited useful life are termed as:

A
Limited assets

B
Depreciation assets

C
Unlimited asset

D
None of these

Solution

The assets which have a limited useful life are termed as Depreciable assets. The assets which are held by a business for the production and supply of goods and services, expected to be used for more than an accounting year and have a limited useful life are known as Depreciable Assets.

Hence, Option (B) is the correct answer.
Question 4
1 / -0

Under the diminishing balance method depreciation:

A
Increases every year.

B
Decreases every year.

C
Remain constant every year.

D
None of them.
Question 5
1 / -0

Loss on sale of plant and machinery should be written off against:

A
Share premium

B
Depreciation fund account

C
Sale account

D
Profit & loss account

Solution

Loss of sale of plant and machinery should be written off against Depreciation fund account.

Hence, option (B) is the correct answer.
Question 6
1 / -0

Under the diminishing balance method, depreciation is calculated on:

A
Scrap value

B
On original value

C
On book value

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.

Hence, Option (C) is the correct answer.
Question 7
1 / -0

An additional purchase of Rs. 2000 was made for a machine on 10th October. Under straight line method, under Income tax Act, depreciation __________.

A
will be done for half of the year

B
will be done from the beginning of the year

C
Both a & b

D
None of the above

Solution

Depreciation as per Income tax is calculated in a different manner than what is calculated under the Companies Act. In the given case, the machine has been added after the first six months from the beginning of the financial year. As per the income tax act, if a machine is added after the first six months, depreciation is calculated at 50% of the amount and at a rate specified by the act.
(Note: Half of the year or 50% is one and the same)
Question 8
1 / -0

The depreciation method that is best suited for a machine that is being used on an hourly basis will be ________.

A
depletion method

B
double declining method

C
declining method

D
service house method
Question 9
1 / -0

Under the fixed installment method of providing depreciation it is calculated on

A
Original cost

B
On balance amount

C
On scrap value

D
None of them

Solution

Fixed installment method of depreciation is also known as Straight line method of providing depreciation. Under this method, the amount of depreciation is constant as it is charged on the original cost of the asset.
Question 10
1 / -0

The economic factors causing depreciation is/are:

A
Time factor

B
Obsolescence and inadequacy

C
Wear and tear

D
Money valuation
Solution
There are four cause due to which depreciation takes place:
Physical Deterioration
Economic Factors
Time Factors
Depletion
Economic factors arises due to obsolescence and inadequacy. Obsolescence means the process of becoming obsolete and out of date. New model and new technology may make the asset obsolete even though it is in good physical condition. Inadequacy refers to the stoppage of asset’s usage because of growth and changes in the size of the firm

Hence, Option (B) is the correct answer.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Depreciation Provisions and Reserves Test - 45

Result

Depreciation Provisions and Reserves Test - 45

Score

-

Rank

-

SHARING IS CARING

Question 1

Payment

Receipt

Expenditure

None of these

Question 2

income tax saving

customs tax saving

sales tax saving

excise duty saving

Question 3

Limited assets

Depreciation assets

Unlimited asset

None of these

Solution

Question 4

Increases every year.

Decreases every year.

Remain constant every year.

None of them.

Question 5

Share premium

Depreciation fund account

Sale account

Profit & loss account

Solution

Question 6

Scrap value

On original value

On book value

None of them

Solution

Question 7

will be done for half of the year

will be done from the beginning of the year

Both a & b

None of the above

Solution

Question 8

depletion method

double declining method

declining method

service house method

Question 9

Original cost

On balance amount

On scrap value

None of them

Solution

Question 10

Time factor

Obsolescence and inadequacy

Wear and tear

Money valuation

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.