MCQ on Depreciation
Financial Accounting MCQ on Depreciation
Also Read Financial Accounting MCQ
- MCQ on GAAP
- MCQ on Basic Fundamentals
- MCQ on Financial Statements
- MCQ on Accounting Standards
- MCQ on Depreciation
1. Erosion, rust, rot, and decay cause of depreciation is an example of
(a) Physical deterioration
(b) Economic factor
(c) Time factors
(d) None of the above
Answer (a) Physical deterioration
2. Lease, patents and copy right related to which cause of depreciation
(a) Physical deterioration
(b) Economic factor
(c) Time factors
(d) None of the above
Answer (c) Time factors
3. Obsolescence means is
(a) Update
(b) Out of date
(c) Up to date
(d) None of the above
Answer (b) Out of date
4. Decrease in the value of natural assets is
(a) Depreciation
(b) Depletion
(c) Amortization
(d) None of the above
Answer (b) Depletion
5. Decrease in the value of fixed assets is
(a) Depletion
(b) Amortization
(c) Depreciation
(d) None of the above
Answer (c) Depreciation
6. Decrease in the value of intangible assets is
(a) Amortization
(b) Depreciation
(c) Depletion
(d) None of the above
Answer (a) Amortization
7. Depreciation is a process of
(a) Allocation
(b) Valuation
(c) Both
(d) None of the above
Answer (a) Allocation
8. Depreciation arise because due to
(a) Physical wear and tear
(b) Fall in money value
(c) Fall in market price
(d) None of the above
Answer (a) Physical wear and tear
9. Under straight line methods of charging depreciation, value of depreciation
(a) Increase every year
(b) Decrease every year
(c) Constant every year
(d) None of the above
Answer (c) Constant every year
10. Under Diminishing Balance methods of charging depreciation, value of depreciation
(a) Constant every year
(b) Decrease every year
(c) Increase every year
(d) None of the above
Answer (b) Decrease every year
11. Under straight line methods of charging depreciation, value of depreciation charge on
(a) Original cost
(b) Written down value
(c) Scrap value
(d) None of the above
Answer (a) Original cost
12. Under Diminishing Balance methods of charging depreciation, value of depreciation charge on
(a) Originalcost
(b) Scrap value
(c) Written down value
(d) None of the above
Answer (c) Written down value
13. Value of assets may be reduce to zero in which methods, if depreciation charge throughout the life of the assets
(a) Fixed installment methods
(b) Written down value methods
(c) Insurance policy methods
(d) None of the above
Answer (a) Fixed installment methods
14. The amount of depreciation charge on machinery will be debited to
(a) Machinery account
(b) Cash account
(c) Depreciation account
(d) None of the above
Answer (c) Depreciation account
15. Loss on sale of machinery should be written off against
(a) Assets account
(b) Depreciation fund account
(c) Sale account
(d) Loss account
Answer (b) Depreciation fund account
16. Depreciation is ……..of cost of fixed assets
(a) Apportionment
(b) Allocation
(c) Expenses
(d) None of the above
Answer (a) Apportionment
17. Mines assets related to
(a) Depreciation
(b) Amortization
(c) Depletion
(d) None of the above
Answer (c) Depletion
18. The term refer to the damage done to a building or other property during tenancy is called as
(a) Dilapidation
(b) Depreciation
(c) Depletion
(d) All of the above
Answer (a) Dilapidation
19. Why depreciation is charged
(a) To know the true profit
(b) To make provision for replacement
(c) To show true financial position
(d) All of the above
Answer (d) All of the above
20. What is the cause of depreciation?
(a) Rot & Rust
(b) Out of date
(c) Extraction of oil from oil well
(d) All of the above
Answer (d) All of the above
