Test: Depreciation Provisions And Reserves - 1


10 Questions MCQ Test Crash Course of Accountancy - Class 11 | Test: Depreciation Provisions And Reserves - 1


Description
This mock test of Test: Depreciation Provisions And Reserves - 1 for Commerce helps you for every Commerce entrance exam. This contains 10 Multiple Choice Questions for Commerce Test: Depreciation Provisions And Reserves - 1 (mcq) to study with solutions a complete question bank. The solved questions answers in this Test: Depreciation Provisions And Reserves - 1 quiz give you a good mix of easy questions and tough questions. Commerce students definitely take this Test: Depreciation Provisions And Reserves - 1 exercise for a better result in the exam. You can find other Test: Depreciation Provisions And Reserves - 1 extra questions, long questions & short questions for Commerce on EduRev as well by searching above.
QUESTION: 1

Q  Every fixed asset loses its value due to use or other reasons. This decline in the value of asset is known as

Solution:

The fixed assets are long-term assets. They help in the production of goods and services. However, when an asset is in use its value decreases due to the normal wear and tear, efflux of time and obsolescence. This reduction in the value of a fixed asset is known as depreciation.

QUESTION: 2

Following are the causes of Depreciation except

Solution:
QUESTION: 3

The term depletion is used for :

Solution:

Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals, and oil from the earth. Like depreciation and amortization, depletion is a non-cash expense that lowers the cost value of an asset incrementally through scheduled charges to income.

QUESTION: 4

An alternative term used for accumulated depreciation expenses?

Solution:

Provision for depreciation is an alternative term used for accumulated depreciation expenses. Depreciation expense is recognized on the income statement as a non-cash expense that reduces the company's net income.

QUESTION: 5

Depreciation charged under diminishing method

Solution:
QUESTION: 6

Which of the following is not a type of reserve

Solution:
QUESTION: 7

What is depreciation?

Solution:
QUESTION: 8

Depreciation helps in determining

Solution:
QUESTION: 9

What is the rate of charging depreciation under diminishing method?

Solution:

Under this method, the amount of depreciation is calculated as a fixed percentage of the reducing or diminishing value of the asset standing in the books at the beginning of the year, so as to bring down the book value of the asset to its residual value. The amount of depreciation goes on decreasing every year.

QUESTION: 10

Under which depreciation method the amount of depreciation expenses remains same throughout the useful life of a fixed asset

Solution: