WELCOME TO

QUIZ EVENT
Organized by
T.Deva Prasad,M.B.A,M.Com,SAP Trainer
GAYATRI Degree & PG College
1. THE AMOUNT OF DEPRECIATION
DOES NOT DEPEND UPON

a) will of business
b) cost of asset
c) scrap value
d) Life of asset
2. WHICH OF THE FOLLOWING IS NOT
TRUE ABOUT STRAIGHT LINE METHOD?
a) It is also known as original cost/fixed
installment method.
b) Depreciation remains same from year to
year.
c) It is generally basis of charging depreciation
as per the Income Tax Act.
d) The residual value of asset becomes zero
after certain years.
3. THE METHOD WHERE AMOUNT OF
DEPRECIATION IS MORE IN INITIAL YEAR
AND GRADUALLY GOES ON DECREASING IS
a) straight line method
b) annuity method
c) diminishing balance method
d) both straight line and annuity method
4. A MACHINE COSTING RS. 4,50,000 AND HAVING SCRAP VALUE OF 20% OF
COST AFTER 5 YEARS WAS PURCHASED ON 31 JULY, 2009. IT IS TO BE
DEPRECIATED UNDER STRAIGHT LINE METHOD. THE DEPRECIATION TO BE
CHARGED FOR YEAR ENDING 31 MARCH, 2010 WILL BE

a) Rs. 48,000
b) Rs. 72,000
c) Rs. 54,000
d) Rs. 42,000
5. THE METHOD IN WHICH COST OF ASSET AS WELL AS
INTEREST ON CAPITAL IS ALSO CONSIDERED AS THE
BASIS OF DEPRECIATION IS

a) straight line method

b) written down value method
c) annuity method
d) sinking fund method
6. THE METHOD IN WHICH AMOUNT CHARGEABLE TO
DEPRECIATION ALONG WITH INTEREST RECEIVED IS
INVESTED EVERY YEAR IS CALLED

a) straight line method

b) written down value method
c) annuity method
d) sinking fund method
7. THE METHOD USED FOR DEPRECIATING
MINES, QUARRIES ETC. IS

a) machine hour method

b) depletion method
c) annuity method
d) sinking fund method
8. THE ASSETS SHOULD BE RECORDED
IN THE BALANCE SHEET AT
a) market value
b) cost price
c) M.V. or cost price, whichever is less
d) cost less depreciation
9. THE AMOUNT OF INTEREST PAID FOR THE LOAN TAKEN FOR
THE PURCHASE OF MACHINERY BEFORE ITS INSTALLATION IS

a) capital expense
b) revenue expense
c) deferred revenue expense
d) not an expense at all
10. A MACHINE COSTING RS. 10,00,000 WAS PURCHASED ON 1 JULY, 2008. IT IS TO BE DEPRECIATED @12.5% P.A. UNDER DIMINISHING
BALANCE METHOD. THE MACHINE WAS SOLD ON 31 MARCH, 2010 FOR RS. 7,00,000. FIND OUT THE PROFIT OR LOSS ON SALE OF MACHINE.

a) Rs. 50,000 profit

b) Rs. 50,000 loss
c) Rs. 65,625 profit
d) Rs. 92,969 loss
11. THE VALUE OF A MACHINE ON 1 APRIL, 2010 WAS RS. 29,16,000.
IT WAS PURCHASED ON 1 APRIL, 2007 AND WAS BEING DEPRECIATED
AT 10% BY DIMINISHING BALANCE METHOD. FIND ITS ORIGINAL COST.

a) Rs. 40,00,000
b) Rs. 32,40,000
c) Rs. 36,00,000
d) Rs. 29,16,000
12. A MACHINE COSTING RS. 10,00,000 WAS PURCHASED ON 1 APRIL,
2008. IT IS TO BE DEPRECIATED AT15% P.A. UNDER STRAIGHT LINE
METHOD. THE MACHINE WAS SOLD ON 31 JULY, 2010 FOR RS. 7,00,000.
FIND OUT THE PROFIT OR LOSS ON SALE OF MACHINE

a) Rs. 50,000 profit

b) Rs. 50,000 loss
c) Rs. 1,50,000 profit
d) Rs. 1,50,000 loss
13. A MACHINE COSTING RS. 9,60,000 WAS PURCHASED ON 15 JULY,
2009. IT IS TO BE DEPRECIATED AT12.5% P.A. UNDER DIMINISHING
BALANCE METHOD. THE DEPRECIATION TO BE CHARGED FOR YEAR
ENDING 31 MARCH, 2010 WILL BE

a) Rs. 1,20,000
b) Rs. 85,000
c) Rs. 75,000
d) Rs. 95,000
14.ON WHICH OF THE FOLLOWING ASSETS,
THE DEPLETION METHOD IS ADOPTED ?

a) Plant & machinery

b) Land &building
c) Goodwill
d) Wasting assets like mines and quarries
15. THE TAXATION AUTHORITIES
NORMALLY FOLLOW
a) straight line method
b) written down value method
c) annuity method
d) sinking fund method
16. THE MAIN AIM OF PROVIDING DEPRECIATION IS:

a) To calculate net profit

b) To show previous profit
c) To satisfy the tax department
d) To reduce tax
17. DEPRECIATION ARISES DUE
TO:
a) Wear and tear
b) Reduction in the value of assets
c) Increase in the value of liabilities
d) Reduction in capital
18.  DEPRECIATION IS A
PROCESS OF
a) Allocation
b) Valuation
c) Both (1) and (2)
d) None of the above
19. UNDER THE STRAIGHT LINE METHOD
OF PROVIDING DEPRECIATION, IT
a) Increases every year
b) Decreases every year
c) Remains constant every year
d) None of the above
20. DEPRECIATION TO
MACHINERY IS DEBITED TO:
a) Profit and loss a/c
b) Machinery a/c
c) Depreciation a/c
d) Expenses and loss a/c
21. THE TOTAL AMOUNT OF DEPRECIATION
OF AN ASSET CANNOT EXCEED ITS

a) Scrap value
b) Market value
c) Depreciation value
d) None of these
22. DEPRECIATION OF PLANT IS
RECORDED IN THE:
a) Profit and loss a/c
b) Trading a/c
c) Assets a/c
d) Balance sheet
23. WHICH OF THE FOLLOWING ITEMS PROVIDES THE
IMPORTANT FUNCTION OF PROTECTING PART OF
INCOME FROM TAXES

a) Inventory
b) Supplies
c) Machinery
d) Depreciation
24.WHICH OF THE FOLLOWING
IS NOT A CASH OUTFLOW?
a) New equipment
b) Cash drawings
c) Depreciation
d) Commission paid
25. UNDER THE FIXED INSTALLMENT
METHOD, DEPRECIATION IS CALCULATED ON
a) Original cost
b) Balance amount
c) Scrap value
d) None of the above
26. UNDER THE DIMINISHING BALANCE
METHOD, DEPRECIATION IS CALCULATED ON

a) Original cost
b) Book value
c) Scrap value
d) None of the above
27.ASSETS WITH A LIMITED
USEFUL LIFE ARE TERMED

a) Limited assets
b) Depreciation assets
c) Unlimited assets
d) None of the above
28.THE PROCESS OF BECOMING OUT
OF DATE OR OBSOLETE IS TERMED

a) Physical deterioration
b) Depletion
c) Obsolescence
d) Amortization
 
29.WHICH OF THESE TERMS IS USED TO WRITE
OFF IN REFERENCE TO TANGIBLE FIXED ASSETS

a) Depreciation
b) Depletion
c) Amortization
d) Both (2) and (3)
 
30.WHICH OF THESE TERMS IS USED TO WRITE
OFF IN REFERENCE TO INTANGIBLE FIXED ASSETS

a) Depreciation
b) Depletion
c) Amortization
d) Both (2) and (3)
31. IT IS NOT UNUSUAL FOR THE DEPRECIATION ON THE
FINANCIAL STATEMENTS TO BE DIFFERENT FROM THE
DEPRECIATION USED FOR _______ PURPOSES.
32. THIS COMPONENT OF PROPERTY, PLANT AND
EQUIPMENT IS NOT DEPRECIATED.________
33.ANOTHER NAME FOR THE ESTIMATED SCRAP OR SALVAGE
VALUE OF AN ASSET AT THE END OF ITS USEFUL
LIFE________________
34. WHEN THE CASH PROCEEDS FROM THE SALE OF AN ASSET USED IN THE
BUSINESS IS LESS THAN THE ASSET'S BOOK VALUE AT THE TIME OF THE SALE,
IT RESULTS IN A ________ BEING REPORTED ON THE INCOME STATEMENT.
35.FORMULA FOR SLM________
36.JOURNAL ENTRIE FOR INTRESET ON ASSTES
37.FORMULA FOR DEPLETION METHOD
_________
38. WHAT IS THE JOURNAL ENTRIES FOR LOSS
ON SALE OF MACHINERY
39. WHAT IS PROCESS CALLED, WHERE COSTS OF THE NATURAL
RESOURCES ARE ALLOCATED OVER ITS USEFUL LIFE?
40.WHAT IS THE ENTRY FOR
DEPRECIATION