Total depreciation of an asset cannot exceed its:

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. An asset must be _______ by the business to be shown as an asset in its “balance sheet”

   A. Possessed
   B. Owned
   C. Controlled
   D. Used

3. If the total liabilities of a business decrease by $5000 what will be the effect on total asset?

   (assuming the amount of capital remain same)

   A. Remain constant
   B. Decrease by $5000
   C. Increase by $5000
   D. Increase by $10,000

4. In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?

   A. Straight-line method
   B. Written down value method
   C. Units-of-production method
   D. Sum-of-the years‘-digits method

5. Calculate the amount of cash if: Total assets=$10,000 Total liabilities=$10,000 Total Capital=$5000

   A. $6000
   B. $10,000
   C. $5000
   D. $1000

6. Depreciation decreases____________?

   A. Liabilities
   B. Cash
   C. Bank
   D. Capital

7. Which of the following statements best describes the purpose of depreciation?

   A. Regular reduction of asset value to correspond to changes in market value as the asset ages
   B. A process of correlating the market value of an asset with its gradual decline in physical efficiency
   C. Allocation of cost in a manner that will ensure that Plant and Equipment items are not carried on the Balance Sheet in excess of net realizable value
   D. Allocation of the cost of an asset to the periods in which services are received from the asset

8. The main objective of providing depreciation is to?

   A. Calculate the true profit
   B. Show the true financial position in the Balance Sheet
   C. Provide funds for replacement of fixed assets
   D. Both A. and B. above

9. Which of the following statements is correct about Depreciation?

   A. Depreciation cannot be provided in case of loss in a financial year
   B. Depreciation is a charge against profit
   C. Depreciation is provided in the books only when there is profit
   D. Depreciation is an appropriation of profit

10. Depreciation Account appearing in the Trial Balance is shown in:

    A. Profit and Loss A/c
    B. Trading A/c
    C. Deducted from the concerned assets A/c
    D. Shown on the liability side