Fixed assets and Depreciation MCQs
Which of the following accounting concepts or principles require the calculation of depreciation of the fixed assets?
A) Prudence conceptWRONG ANSWER
B) Accrual concept WRONG ANSWER
C) Consistency conceptWRONG ANSWER
D) Matching conceptRIGHT ANSWER!!!
A car was purchased for $5500. Its residual value was estimated to be $500 while its monthly depreciation expenses are $100 using straight line method. Which of the following is the annual rate of depreciation?
A) 20%WRONG ANSWER
B) 24%RIGHT ANSWER!!!
C) 2%WRONG ANSWER
D) 25%WRONG ANSWER
Under which method of depreciation the amount of depreciation expenses remains constant throughout the useful life of a fixed asset
A) Reducing balance method WRONG ANSWER
B) Unit of activity method WRONG ANSWER
C) Straight line method RIGHT ANSWER!!!
D) None of theseWRONG ANSWER
An increase in the value of fixed asset is referred to as:
A) DepreciationWRONG ANSWER
B) AppreciationRIGHT ANSWER!!!
C) Market capitalizationWRONG ANSWER
D) Reverse depreciationWRONG ANSWER
A fixed asset having book value of $2000 was sold for $1500. Which of the following is the gain or loss on the sale of fixed asset?
A) $500 gain WRONG ANSWER
B) $1500 lossWRONG ANSWER
C) $500 lossRIGHT ANSWER!!!
D) $1000 gainWRONG ANSWER
Book value of a fixed asset equals to market value or sale proceeds of a fixed asset if:
A) Gain on sale=0WRONG ANSWER
B) Loss on sale=0WRONG ANSWER
C) Gain or loss on sale=0 RIGHT ANSWER!!!
D) Gain > loss on saleWRONG ANSWER
The term ______ is generally used for the depreciation of natural resources
A) AmortizationWRONG ANSWER
B) DepletionRIGHT ANSWER!!!
C) AppreciationWRONG ANSWER
D) Disposal valueWRONG ANSWER
Which of the following is a biological asset?
A) LandWRONG ANSWER
B) BuildingWRONG ANSWER
C) EnvironmentWRONG ANSWER
D) Living plants and animals RIGHT ANSWER!!!
Items of property, plant and equipment can be recognized as assets when their cost can be measured reliably and it is likely that the future economic benefits associated with the assets:
A) Will increase gradually WRONG ANSWER
B) Will diminish with the passage of time WRONG ANSWER
C) will flow to the entity RIGHT ANSWER!!!
D) won’t be availableWRONG ANSWER
Under the revaluation model of fixed assets provided by the international accounting standards, the revaluation of the fixed assets should be carried out:
A) After 10 years WRONG ANSWER
B) on a regular basisRIGHT ANSWER!!!
C) Once in 5 years WRONG ANSWER
D) None of themWRONG ANSWER