CBSE MCQ Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves

MCQ Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves : MCQ Questions for Class 11 Accountancy with Answers PDF Free Download prepared here according to the latest CBSE RBSE and Other State Board syllabus and NCERT curriculum.

MCQ Class 11 Accountancy Chapter 7 Wise with answer and Free PDF Download

MCQ Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves

Q1. Which of the following is the cause of depreciation?

(i) By permanent fall in prices
(ii) By constant use
(iii) By Expiry of time
(iv) All of the Above

(iv) All of the Above

Q2. Which method of charging depreciation is accepted by Income Tax Act?

(i) Written down value method
(ii) Both Written down value method and Straight Line method
(iii) Straight Line method
(iv) None of the above

(i) Written down value method

Q3. Which of the following is the example of Capital Reserve?

(i) Workmen’s Compensation Fund
(ii) None of these
(iii) Premium Received on issue of shares or debentures
(iv) General Reserve

(iii) Premium Received on issue of shares or debentures

Q4. Which one is not the cause of depreciation?

(i) Efflux of time.
(ii) Price fluctuation.
(iii) Obsolescence.
(iv) Natural wear and tear.

(ii) Price fluctuation.

Q5. Depreciation is which of the following expenditure:

(i) Non-cash
(ii) Both cash and non-cash
(iii) Cash
(iv) None of the above

(i) Non-cash

Q6. Dividend Equalisation Reserve is :

(i) Specific Reserve
(ii) None of these
(iii) Secret Reserve
(iv) General Reserve

(i) Specific Reserve

Q7. Depreciation is calculated from the date of .

(i) Purchase of asset
(ii) Receipt of asset at business premises
(iii) Asset put to use
(iv) Asset installed

(iii) Asset put to use

Q8. Which of the following statements is NOT true about Reserves?

(i) It is a charge against profits.
(ii) It is an appropriation of profit.
(iii) It is shown on the liability side of Balance sheet.
(iv) It is discretionary as a matter of financial prudence.

(i) It is a charge against profits.

Q9. According to Companies Act, 1956 Secret Reserves can be created by:

(i) Only Private Company
(ii) Banking and insurance companies
(iii) Only Public Company
(iv) Companies Registered under Companies Act

(ii) Banking and insurance companies

Q10. The term____is used to show loss in the value of intangible assets.

(i) Amortization
(ii) Obsolescence
(iii) Depletion
(iv) Depreciation

(i) Amortization

Q11. Under which method the amount of depreciation remains same year after year?

(i) Fixed Installment Method
(ii) Reducing Balance Method
(iii) Annuity method
(iv) Depletion Method

(i) Fixed Installment Method

Q12. Depreciation is Charged on :

(i) Current Assets
(ii) Fixed Tangible Assets
(iii) None of these
(iv) Both Current and Fixed Assets

(ii) Fixed Tangible Assets

Q13. If the amount of any known liability can be determined with accuracy

(i) a liability should be provided.
(ii) a provision should be made,
(iii) a reserve should be set aside.
(iv) None of these.

(i) a liability should be provided.

Q14. Which of the following factor DOES NOT affect the amount of depreciation?

(i) Market value of asset
(ii) Estimated useful life of asset
(iii) Total cost of asset
(iv) Scrap value

(i) Market value of asset

Q15. The cause of Depreciation is :

(i) Wear and tear
(ii) Obsolescence
(iii) All of these
(iv) Usage of Asset

(iii) All of these

Q16. The loss on sale of an asset is debited to:

(i) Profit and Loss Account
(ii) Trial Balance Cr. Side
(iii) Balance Sheet
(iv) Trading Account

(i) Profit and Loss Account

Q17. Dividend Equalization Reserveand Debenture Redemption reserveare examples of

(i) Revenue Reserve
(ii) General Reserve
(iii) Capital Reserve
(iv) Secret Reserve.

(i) Revenue Reserve

Q18. Under Reducing Balance Method, depreciation to be charged :

(i) Scrap Value
(ii) None of these
(iii) Real Value
(iv) Original value

(ii) None of these

Q1. Which method of depreciation suffers from the limitation of unequal burden on profit and loss account?

a) Fixed Instalment Method
b) Reducing Balance Method
c) Depletion Method
d) Annuity method

a) Fixed Instalment Method


Q2. Which method of charging depreciation is accepted by Income Tax Act?

a) Written down value method
b) Both Written down value method and Straight Line method
c) Straight Line method
d) None of the above

a) Written down value method


Q3. Depreciation is a process of:

a) Allocation of cost
b) None of the above
c) Valuation of asset
d) Both valuation of asset and allocation of cost

a) Allocation of cost


Q4. Depreciation is which of the following expenditure:

a) Non-cash
b) Both cash and non-cash
c) Cash
d) None of the above

a) Non-cash


Q5. Which of the following statements is NOT true about Provisions?

a) It is an appropriation of profit.
b) It is a charge against profits.
c) It is shown on the liability side of Balance sheet.
d) It is discretionary as a matter of financial prudence.

a) It is an appropriation of profit.


Q6. Which of the following statements is NOT true about Reserves?

a) It is a charge against profits.
b) It is an appropriation of profit.
c) It is shown on the liability side of Balance sheet.
d) It is discretionary as a matter of financial prudence.

a) It is a charge against profits.


Q7. If the amount of any known liability cannot be determined with substantial accuracy:

a) A provision should be created.
b) A Contingent liability should be created.
c) A definite liability should be created.
d) A reserve should be created.

a) A provision should be created.


Q8. Under which method the amount of depreciation remains same year after year?

a) Fixed Installment Method
b) Reducing Balance Method
c) Annuity method
d) Depletion Method

a) Fixed Installment Method


Q9. As per the Original Cost method which is the correct formula for calculating Annual depreciation?

a) Depreciation = Cost of asset Scrap value/ Estimated life of asset
b) Depreciation = Scrap value – Cost of asset / Estimated life of asset
c) Depreciation = Cost of asset – Market value / Estimated life of asset
d) Depreciation = Cost of asset – Scrap value/ Market value of asset

a) Depreciation = Cost of asset Scrap value/ Estimated life of asset


Q10. Asset Disposal A/c is prepared when :

(a) Provision for Depreciation A/c is prepared
(b) Asset A/c is prepared
(c) Profit & Loss A/c is prepared
(d) Depreciation A/c is prepared

(a) Provision for Depreciation A/c is prepared


Q11.Which of the following is the example of Capital Reserve?

(a) Workmen’s Compensation Fund
(b) None of these
(c) Premium Received on issue of shares or debentures
(d) General Reserve

(c) Premium Received on issue of shares or debentures


Q12. Which of the following is the example of Revenue Reserve?

(a) Profit on Redemption of Debentures
(b) Profit on Revaluation of Fixed
(c) Investment Fluctuation Fund
(d) Profit on Re-issue of forfeited shares

(c) Investment Fluctuation Fund


Q13. Dividend Equalisation Reserve is :

(a) Specific Reserve
(b) None of these
(c) Secret Reserve
(d) General Reserve

(a) Specific Reserve


Q14. General Reserves are shown in :

(a) Revaluation Account
(b) Profit and Loss Account
(c) None of these
(d) Balance Sheet

(d) Balance Sheet


Q15. According to Companies Act, 1956 Secret Reserves can be created by:

(a) Only Private Company
(b) Banking and insurance companies
(c) Only Public Company
(d) Companies Registered under Companies Act

(b) Banking and insurance companies


Fill in the correct words

Q16. Depreciation is decline in the value of ………………….


Q17. Installation, freight and transport expenses are a part of ……………….

Acquisition cost


Q18. Provision is a ………………. against profit.

Charge


Q19. Reserve created for maintaining a stable.rate of dividend is termed as ………………….

Dividend Equilisation Fund

MCQ Questions for Class 11 Accountancy with Answers Chapter Wise PDF Download

MCQ Questions for Class 11 Accountancy: Financial Accounting

  1. MCQ Class 11 Accountancy Chapter 1 Introduction to Accounting
  2. MCQ Class 11 Accountancy Chapter 2 Theory Base of Accounting
  3. MCQ Class 11 Accountancy Chapter 3 Recording of Transactions 1
  4. MCQ Class 11 Accountancy Chapter 4 Recording of Transactions 2
  5. MCQ Class 11 Accountancy Chapter 5 Bank Reconciliation Statement
  6. MCQ Class 11 Accountancy Chapter 6 Trial Balance and Rectification of Errors
  7. MCQ Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves
  8. MCQ Class 11 Accountancy Chapter 8 Bills of Exchange
  9. MCQ Class 11 Accountancy Chapter 9 Financial Statements 1
  10. MCQ Class 11 Accountancy Chapter 10 Financial Statements 2
  11. MCQ Class 11 Accountancy Chapter 11 Accounts from Incomplete Records
  12. MCQ Class 11 Accountancy Chapter 12 Applications of Computers in Accounting
  13. MCQ Class 11 Accountancy Chapter 13 Computerised Accounting System
  14. MCQ Class 11 Accountancy Chapter 14 Structuring Database for Accounting
  15. MCQ Class 11 Accountancy Chapter 15 Accounting System Using Database Management System

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