Depreciation is calculated on the____________?

Related Mcqs:

1. Which of the following statements is true with regard to written down value method of depreciation?
   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

   A. Only (i) above
   B. Only (ii) above
   C. Both (i) and (ii) above
   D. (i),(ii) and (iii) above

2. The Balance Sheet gives information regarding the____________?

   A. Results of operations for a particular period
   B. Financial position during a particular period
   C. Profit earning capacity for a particular period
   D. Financial position as on a particular date

3. Which of the following is not a method of charging depreciation?

   A. Straight line Method
   B. Written down value Method
   C. Discounted present value Method
   D. Sum of digits Method

4. A second hand car is purchased for 2,00,000 and sold at 1,40,000 after two years. If depreciation is charged @ 10% on SLM method, find the profit or loss on sale of the car?

   A. 20,000 Loss
   B. 20,000 Profit
   C. 10,000 Loss
   D. 10,000 Profit

5. A second hand car is purchased for 2,00,000 and sold at 1,40,000 after two years. If depreciation is charged @ 10% on written down value method, find the profit or loss on sale of the Second hand car?

   A. Loss of 20,000
   B. Loss of 22,000
   C. Loss of 11,000
   D. Profit of 11,000

6. Which of the following is true with respect to providing depreciation under diminishing balance method?

   A. The amount of depreciation keeps increasing every year while the rate of depreciation keeps decreasing
   B. The amount of depreciation and the rate of depreciation decrease every year
   C. The amount of depreciation decreases while the rate of depreciation remains the same
   D. The amount of depreciation and the rate of depreciation increases every year

7. Depreciation is a process of____________?

   A. Valuation
   B. Valuation and allocation
   C. Allocation
   D. Appropriation

8. Which of the following is an external cause of depreciation?

   A. Routine repair and maintenance
   B. Misuse
   C. Obsolescence
   D. Wear and tear

9. ____________is also known as Appraisal system of depreciation?

   A. Inventory system
   B. Survey system
   C. Annuity system
   D. Insurance

10. Depreciation fund method is also known as__________?

    A. Sinking Fund Method
    B. Annuity Method
    C. Sum of Year Digits Method
    D. None of these

    Submitted by: Syed Nizakat Ali Shah