Depreciation Provisions And Reserves CBSE Questions & Answers

Depreciation Provisions And Reserves

This is Accountancy Class 11 Depreciation Provisions and Reserves CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
Which journal entry to be passed For transferring the provision for depreciation already charged on the asset sold from the provision for depreciation account to the asset disposal account:
  • A
    Option A
  • B
    Option B
  • C
    Option C
  • D
    Option D
    Correct
2
Which of the following is the limitation of the Written down value
  • A
    This method is suitable for fixed assets, which lasts for long
  • B
    Income Tax Act accept this method for tax purposes;
  • C
    As a large portion of cost is written-off in earlier years, loss due to obsolescence gets reduced;
  • D
    The value of the asset can never be zero
    Correct
3
Following are the provisions except Examples of provisions are :
  • A
    Provision for taxation
  • B
    Provision for depreciation;
  • C
    Provision for liability
    Correct
  • D
    Provision for bad and doubtful debts;
4
Obsolescence means decrease in assets
  • A
    Due to its use in business operations
  • B
    Assets become out of fashion
    Correct
  • C
    Both
  • D
    None
5
Depreciation is a process of
  • A
    Allocation of cost
    Correct
  • B
    Valuation of assets
  • C
    Valuation of charge
  • D
    Valuation of Profit
6
If the amount of any known liability can not be determined with accuracy
  • A
    A liability should be provided
  • B
    A reserve should be set aside
  • C
    A provision should be made
    Correct
  • D
    A asset should be provided
7
Which of the following is true relating to Secret reserve
  • A
    All of these
    Correct
  • B
    Not shown in the balance sheet
  • C
    Profit are shown by less amount than actual
  • D
    Appropriation of profit
8
Dividend equalization reserve is termed as reserves
  • A
    Charged against assets
  • B
    Created out of profits
    Correct
  • C
    Charged against profit
  • D
    Created out of assets
9
How secret reserve can be created
  • A
    Under valuating stock
  • B
    By charging capital expenditure to revenue
  • C
    All of these
    Correct
  • D
    By making excessive provisions
10
Which reserve is crated out of capital gain
  • A
    Revenue Reserves
  • B
    General Reserves
  • C
    Capital Reserves
    Correct
  • D
    Specific Reserves
11
Good debt
  • A
    Who have good characters
  • B
    Are those whose collection of credit is certain
    Correct
  • C
    Are those whose collection of credit is uncertain
  • D
    Who have paid the whole amount
12
Which one is false relating to Depreciation
  • A
    It increases the book value of fixed assets.
    Correct
  • B
    It is an expired cost and must be deducted before calculating taxable profit
  • C
    It is a continuing process.
  • D
    It includes loss of value due to efflux ion of time, usage or obsolescence.
13
Depreciation arise due to
  • A
    None of these
  • B
    Fall in the market value
  • C
    Fall in the value of money
  • D
    Normal wear and tear
    Correct
14
Under which depreciation method the amount of depreciation expenses remain same throughout the useful life of a fixed asset
  • A
    Number of units produced method
  • B
    Straight line method
    Correct
  • C
    Machine hour method
  • D
    Reducing balance method
15
Which of the following is the normal balance of an accumulated depreciation account
  • A
    Both
  • B
    None
  • C
    Debit
    Correct
  • D
    Credit