# Depreciation, Provisions and Reserves MCQ Questions for Class 11 Accountancy Chapter 7 with Answers

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## Q1. Under Reducing Balance Method, depreciation to be charged :

(A) Scrap Value
(B) None of these
(C) Real Value
(D) Original value

## Q2. Which of the following is the cause of depreciation?

(A) By permanent fall in prices
(B) By constant use
(C) By Expiry of time
(D) All of the Above

## Q3. Dividend Equalization Reserveand Debenture Redemption reserveare examples of

(A) Revenue Reserve
(B) General Reserve
(C) Capital Reserve
(D) Secret Reserve.

## Q4. 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

## Q5. The loss on sale of an asset is debited to:

(A) Profit and Loss Account
(B) Trial Balance Cr. Side
(C) Balance Sheet

## Q6. Which of the following is the example of Capital Reserve?

(A) Workmen’s Compensation Fund
(B) None of these
(D) General Reserve

## Q7. The cause of Depreciation is :

(A) Wear and tear
(B) Obsolescence
(C) All of these
(D) Usage of Asset

## Q8. Which one is not the cause of depreciation?

(A) Efflux of time.
(B) Price fluctuation.
(C) Obsolescence.
(D) Natural wear and tear.

## Q9. Which of the following factor DOES NOT affect the amount of depreciation?

(A) Market value of asset
(B) Estimated useful life of asset
(C) Total cost of asset
(D) Scrap value

## Q10. Depreciation is which of the following expenditure:

(A) Non-cash
(B) Both cash and non-cash
(C) Cash
(D) None of the above

## Q11. If the amount of any known liability can be determined with accuracy

(A) a liability should be provided.
(B) a provision should be made,
(C) a reserve should be set aside.
(D) None of these.

## Q12. Dividend Equalisation Reserve is :

(A) Specific Reserve
(B) None of these
(C) Secret Reserve
(D) General Reserve

## Q13. Depreciation is Charged on :

(A) Current Assets
(B) Fixed Tangible Assets
(C) None of these
(D) Both Current and Fixed Assets

## Q14. Depreciation is calculated from the date of .

(A) Purchase of asset
(B) Receipt of asset at business premises
(C) Asset put to use
(D) Asset installed

## Q15. 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

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