Quiz  /  Depreciation Gate & PSU MCQ Questions With Answers

  • 1. 
    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 answer?

  • $20.99
  • $49,226.64
  • $11,333.81
  • $4865.82

  • 2. 
    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

  • 3. 
    S=RM2,000C=RM25,000n=6 yearsFind the annual rate of depreciation using the reducing balance method.

  • 9.8%
  • 15.76%
  • 20.36%
  • 34.36%

  • 4. 
    Depreciation in the value of asset is -

  • Permanent decrease
  • Temporary decrease
  • Seasonal decrease
  • None of these

  • 5. 
    Annual depreciation may or may not be equal from year to year.

  • True
  • False

  • 6. 
    Original cost of machinery Rs. 5,500, scrap value Rs. 500, the useful life of machinery 10 years, then the annual value of deprecation will be: 2018

  • Rs. 500
  • Rs. 550
  • Rs. 1000
  • Rs. 1500

  • 7. 
    The value of Assets may rise or fall on account of: 2018

  • Depreciation
  • Depletion
  • Fluctuation
  • Amortization

  • 8. 
    The net book value of assets is obtaining by deducting _______ with accumulated depreciation.

  • depreciation
  • market value
  • percentage of depreciation
  • cost

  • 9. 
    What will be the amount of depreciation of plant for fifth year as per straight line method when original cost of plant $1,000,000; Salvage value $40,000 , Expected useful life 10 years?

  • $62,000
  • $84,000
  • $76,000
  • $96,000

  • 10. 
    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

  • 11. 
    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

  • 12. 
    What is the original cost?

  • It is an amount paid for an asset including any tax.
  • It is an amount paid for an asset excluding any tax.

  • 13. 
    Cost = RM 5,000The expected to be obsolete = 5 yearsSalvage value = RM 1,000Find the book value at the end of 3rd year using the straight line method.

  • RM 5,000
  • RM 4,000
  • RM 1,000
  • RM 2,600

  • 14. 
    Find the amount of depreciation chargeable under the straight line method for the second year if amount for first year is $4,000

  • $4000
  • $4400
  • $8000
  • $7600

  • 15. 
    The value of an asset at the end of its useful life is....

  • Annual depreciation
  • Accumulated depreciation
  • Scrap value
  • Book value

  • 16. 
    The physical deterioration in assets due to use in business is called: 2017

  • Depletion
  • Obsolescence
  • Wear and tear
  • Accident

  • 17. 
    A motorcycle which costs RM12,000 is expected to have useful life of 7 years and a scrap value of RM3,000. Calculate the accumulated depreciation of the motorcycle at the end of 4th year using the straight line method.

  • RM5,142.86
  • RM1,258.71
  • RM5,142.68
  • RM1,285.71

  • 18. 
    Residual value of the asset means:

  • The price paid on the purchase of asset
  • The amount realised on the sale of asset
  • The net amount expected to realise on final disposal of assets
  • Reduced value of the asset every year

  • 19. 
    Depreciation of an asset should not exceed the: 2015

  • Original cost
  • Depreciable value
  • Market price
  • Scrap value

  • 20. 
    The decreases in the value of intangible asset is known as: 2019

  • Amortization
  • Depreciation
  • Appreciation
  • Depletion

  • 21. 
    Depreciation for business is -

  • Loss
  • Gain
  • Income
  • Liability

  • 22. 
    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

  • 23. 
    The price of a van is RM120,000. The van is expected to have useful life of 15 years and a scrap value of RM6,000. Calculate the book value of the van at the end of 10th year using the straight line method.

  • RM22,000
  • RM33,000
  • RM44,000
  • RM55,000

  • 24. 
    Depreciation is defined as: allocation of __________of non-current asset over its ______________________.

  • selling price remaining life
  • costuseful life
  • costremaining life
  • selling priceuseful life

  • 25. 
    Loss on the sale of machinery should be written off against: 2016

  • Share premium account
  • Sales account
  • Depreciation fund account
  • None of these

  • 26. 
    The number of years the asset is expected to last (can be used) is....

  • Time
  • Useful life
  • Scrap value
  • Depreciation

  • 27. 
    The value of asset recorded in the statement of financial position is at

  • cost
  • market value
  • net book value
  • cost plus accumulated depreciation

  • 28. 
    In straight line method, depreciation is calculated on: 2018

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

  • 29. 
    Depreciation arises because of; 2019

  • Fall in the market value of an asset
  • Physical wear and tear
  • Fall in the value of money
  • Increase in the value of money
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