Quiz  /  Depreciation Class 12 MCQ Questions With Answers

  • 1. 
    If original cost of an asset is Rs. 10,000, rate of depreciation 10 % p.a. then the value of depreciation under diminishing balance method after third year will be: 2016

  • Rs. 1000
  • Rs. 900
  • Rs. 700
  • Rs. 810

  • 2. 
    The value of Assets may rise or fall on account of: 2018

  • Depreciation
  • Depletion
  • Fluctuation
  • Amortization

  • 3. 
    Depreciation on the diminishing balance method of Rs. 2000 at the rate of 10% p.a after three years will be: 2015

  • Rs. 1400
  • Rs. 1458
  • Rs. 542
  • None of these

  • 4. 
    What is the total amount whatsoever received by selling used or obsolete asset or its spare parts known as?

  • Scrap Value
  • Salvage Value
  • Residual Value
  • All of these

  • 5. 
    The decreases in the value of intangible asset is known as: 2019

  • Amortization
  • Depreciation
  • Appreciation
  • Depletion

  • 6. 
    The period during which the asset will help in earning income of business is known as: 2016

  • Consumed life
  • Expired life
  • Exhausted life
  • Working life

  • 7. 
    In straight line method, depreciation is calculated on: 2018

  • Book value
  • Market value
  • Scrap value
  • Original cost

  • 8. 
    Daniel’s Print Shop purchased a new printer for $35,000. Each year it depreciates at a rate of 5%. How much will the printer be worth in 8 years?

  • $23,219.72
  • $136.72
  • $51,710.94
  • $16,710.94

  • 9. 
    The tax rate used to calculate property taxes.

  • loss on plant asset
  • plant asset record
  • salvage value
  • milage rate

  • 10. 
    Ashley's parents bought a house in 2009 for $118,000. The home's value increases at a rate of 9% annually. How much will the house be worth in 2018? In 2020?

  • $256,283; $304,490
  • $280,778; $304,490
  • $256,283; $374,505
  • $190,245; $225,680

  • 11. 
    Your shiny new boat cost $7650. The depreciation for your boat is 14% per year. Estimate the value of your vehicle in 3 years. What is the equation that models this problem?

  • y= 7650(.14)3
  • y= 7650(.86)3
  • y= 7650(1+.86/1)3*1

  • 12. 
    A method that recognizes a full year's depreciation if the asset is acquired in the first half of the year.

  • modified half-year convention
  • straight-line-depreciation
  • salvage value
  • units-of-production method

  • 13. 
    The decrease in the value of a plant asset because of the removal of a natural resource.

  • salvage value
  • loss on plant asset
  • depletion
  • gain on plant asset

  • 14. 
    Land and anything attached to it; also called real estate.

  • assessed value
  • real property
  • personal property
  • units-of-production method

  • 15. 
    Salem has a population of 15,000 and depreciates at a rate of 8% per year. What is the exponential equation?

  • P = 15,000(-.92)t
  • P=15,000(1.08)t
  • P=15,000(0.92)t
  • P=15,000(.08)t

  • 16. 
    The amount that will be received for an asset at the time of its disposal.

  • straight-line-depreciation
  • units-of-production method
  • assessed value
  • salvage value

  • 17. 
    Which fixed asset is LEAST likely to lose its value over time?

  • land
  • equipment
  • buildings
  • new delivery van

  • 18. 
    Because of land’s permanent nature, it is not subject to depreciation.

  • True
  • False

  • 19. 
    Suppose a culture of bacteria begins with 5000 cells and dies by 30% each year. Write an equation that represents this situation.

  • y=5000(0.7)x
  • y=30(5000)x
  • y=5000(1.3)x
  • y=5000xx

  • 20. 
    The original cost of a plant asset minus accumulated depreciation. (p. 451)

  • current assets
  • plant assets
  • salvage value
  • book value of a plant asset

  • 21. 
    How is depreciation classified?

  • As an asset
  • As an expense
  • As capital
  • none of the above

  • 22. 
    What is the name of the account that shows depreciation accumulating?

  • Depreciation Account
  • Doubtful Depreciation
  • Diminishing Depreciation
  • Provision for Depreciation Account

  • 23. 
    Depreciation arises due to -

  • Fluctuations
  • Fall in the value of money
  • Temporary fall in the market value of asset
  • Physical Wear and tear

  • 24. 
    Main objective of charging depreciation is-

  • Ascertaining true profit or loss
  • Ascertaining true financial position
  • Ascertaining true cost of production
  • All of the above

  • 25. 
    Characteristic of a depreciation is -

  • Decline in the value of assets
  • Depreciation is a permanent nature
  • Depreciation is a known case expense
  • All of these

  • 26. 
    To calculate book value of an asset...

  • original value times the amount of depreciation
  • amount of depreciation divided by current value
  • original value minus amount of depreciation
  • original value divided by depreciation per year

  • 27. 
    Depreciation is the process of -

  • Valuation of asset
  • Allocation of the cost of asset
  • Valuation and allocation of the cost of asset
  • None of the above

  • 28. 
    Factors taken into consideration for providing depreciation are -

  • Total cost of assets
  • Estimated useful life of the asset
  • Estimated scrap value of the asset
  • All of the above

  • 29. 
    A type of accelerated depreciation that multiplies the book value of an asset by a constant depreciation rate to determine annual depreciation.

  • declining-balance-depreciation
  • assessed value
  • Modified Accelerated Cost Recovery System (MACRS)
  • straight-line-depreciation
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