1. Which of the following is true about the straight-line method? A. Complex method B. Cost of depreciation remains constant C. Cost of depreciation changes every year D. Profit and Loss account debited with different amount every year 2. Reduction in the book value of an asset over a period of time is called- A. Appreciation C. Proportion B. Depreciation D. Depletion 3. Which among the following is Not a reason for depreciation? A. Use of asset B. Obsolescence 4. It is the main object of providing depreciation. A. To calculate true profit C. Passage of time D. Repair of an asset C. To show true financial position D. To provide funds for replacement B. To reduce tax 5. Which is excluded in straight line method of depreciation? A. Useful life of the asset B. Cost of the asset 6. It refers to the estimated disposal value of an asset. A. Use value C. Annual cost of repair D. Expected salvage value C. Market value B. Salvage value D. Book value 7. It is an amount which a willing buyer will pay to a willing seller for the property where each has equal advantage and is under no compulsion to buy or sell. A. Use value C. Market value B. Salvage value 8. The amount that the property would give if sold for junk. A. Junk value C. Salvage value D. Book value B. Book value D. Scrap value 9. A type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results. A. Physical depreciation C. Functional depreciation B. Design depreciation D. Demand depreciation 10. It refers to the reduction in the demand for the function that the equipment or asset was designed to render.
1. Which of the following is true about the straight-line method? A. Complex method B. Cost of depreciation remains constant C. Cost of depreciation changes every year D. Profit and Loss account debited with different amount every year 2. Reduction in the book value of an asset over a period of time is called- A. Appreciation C. Proportion B. Depreciation D. Depletion 3. Which among the following is Not a reason for depreciation? A. Use of asset B. Obsolescence 4. It is the main object of providing depreciation. A. To calculate true profit C. Passage of time D. Repair of an asset C. To show true financial position D. To provide funds for replacement B. To reduce tax 5. Which is excluded in straight line method of depreciation? A. Useful life of the asset B. Cost of the asset 6. It refers to the estimated disposal value of an asset. A. Use value C. Annual cost of repair D. Expected salvage value C. Market value B. Salvage value D. Book value 7. It is an amount which a willing buyer will pay to a willing seller for the property where each has equal advantage and is under no compulsion to buy or sell. A. Use value C. Market value B. Salvage value 8. The amount that the property would give if sold for junk. A. Junk value C. Salvage value D. Book value B. Book value D. Scrap value 9. A type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results. A. Physical depreciation C. Functional depreciation B. Design depreciation D. Demand depreciation 10. It refers to the reduction in the demand for the function that the equipment or asset was designed to render.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
4-6 with explanation
Transcribed Image Text:1. Which of the following is true about the straight-line method?
A. Complex method
B. Cost of depreciation remains constant
C. Cost of depreciation changes every year
D. Profit and Loss account debited with different amount every year
2. Reduction in the book value of an asset over a period of time is called-
A. Appreciation
C. Proportion
B. Depreciation
D. Depletion
3. Which among the following is Not a reason for depreciation?
A. Use of asset
B. Obsolescence
4. It is the main object of providing depreciation.
A. To calculate true profit
C. Passage of time
D. Repair of an asset
C. To show true financial position
D. To provide funds for replacement
B. To reduce tax
5. Which is excluded in straight line method of depreciation?
A. Useful life of the asset
B. Cost of the asset
6. It refers to the estimated disposal value of an asset.
A. Use value
C. Annual cost of repair
D. Expected salvage value
C. Market value
B. Salvage value
D. Book value
7. It is an amount which a willing buyer will pay to a willing seller for the property where each has
equal advantage and is under no compulsion to buy or sell.
A. Use value
C. Market value
B. Salvage value
8. The amount that the property would give if sold for junk.
A. Junk value
C. Salvage value
D. Book value
B. Book value
D. Scrap value
9. A type of depreciation is due to the reduction of the physical ability of an equipment or asset to
produce results.
A. Physical depreciation
C. Functional depreciation
B. Design depreciation
D. Demand depreciation
10. It refers to the reduction in the demand for the function that the equipment or asset was designed
to render.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education