Accounting MCQs

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

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

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

A. Written down value
B. Accumulated value
C. Salvage value
D. Residual value

A. Depreciation
B. Physical deterioration of the asset
C. Decrease in market value of the asset
D. Valuation of an asset at a point of time

A. Passage of time, asset usage, and obsolescence
B. Tax regulations and sebi guidelines
C. Tax regulations and asset usage
D. Sebi guidelines and asset usage

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

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

A. Cost price of asset
B. Market price
C. Cost+ transport+ installation expenses
D. Cost or market values whichever is less

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