Fixed assets are subject to depreciation each year. Companies use various methods of depreciation to account for the depreciation expense. As we have covered Depreciation and its different methods in past, it is the right time to do some quizzes to refresh your memories and understanding. We have prepared some MCQs (Multple Choice Questions) that you will find very good for your preparation in exams as well.
Depreciation is a term used to describe:
Cost of the fixed asset which has been consumed,
Cost of the fixed asset which is yet to be consumed
The residual value
Estimated selling price
Write down allowance method of depreciation is used to depreciate fixed assets:
Equal amount each year,
Declining depreciation is charged every period,
Over the basis of sum of year digit.
Which of the following is not a depreciation method of fixed assets:
Straight line,
Declining method,
Sum of year digit method,
Net realizable value.
Depreciation is charged on:
Current assets,
Tangible Fixed assets,
Intangible fixed assets,
Working capital.
Accumulated depreciation is referred to as:
The sum of all the year’s depreciation
1st year depreciation
Last year depreciation
Fair value of the asset.
Accumulated depreciation account is normally a:
Debit balance,
Credit balance,
Zero balance.
Tangible Fixed assets are recorded on the balance sheet at their:
Fair value,
Cost,
Book value,
Estimated useful life of an asset is:
The number of years, economic benefits can be derived from the use of the asset,
The number of years, asset can be used without major repair & maintenance.
The number of times, asset can be run for production without ordinary overhauling.
The cost of the asset is $120,000, salvage value at the end of the useful life of the asset is $20,000. Useful life of the asset is 10 years. What is the amount of depreciation under straight line method?
$ 8,000,
$12,000,
$10,000,
$9,000.