231. Which of the following factors are primarily considered to determine the economic life of an asset?
A. Passage of time, asset usage, and obsolescence
B. Tax regulations and SEBI guidelines
C. Tax regulations and asset usage
D. SEBI guidelines and Asset usage

232. In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?
A. Straight-line method
B. Written down value method
C. Units-of-production method
D. Sum-of-the years‘-digits method

233. Which of the following statements is correct about Depreciation?
A. Depreciation cannot be provided in case of loss in a financial year
B. Depreciation is a charge against profit
C. Depreciation is provided in the books only when there is profit
D. Depreciation is an appropriation of profit

Explanation:
Depreciation is provided as a charge against profits. It is not an appropriation of profit. It
is provided irrespective of whether the business is making a loss or a profit. Hence statement B. is a
true statement.

234. Depreciation is calculated on the____________?
A. Cost price of asset
B. Market price
C. Cost+ Transport+ Installation expenses
D. Cost or market values whichever is less

235. Which of the following is an external cause of depreciation?
A. Routine repair and maintenance
B. Misuse
C. Obsolescence
D. Wear and tear

236. Which of the following is not depreciated?
A. Building
B. Land
C. Plant and Machinery
D. Office equipment

237. ____________is also known as Appraisal system of depreciation?
A. Inventory system
B. Survey system
C. Annuity system
D. Insurance

238. Bad debts recovered account will be transferred to______________?
A. Debtor‘s Account
B. Profit and Loss Account
C. Provision for Doubtful Debt Account
D. Either (b )or C. above
Explanation:
When Bad debts are recovered the entry is
Cash A/c …………………………………………………… Dr.
To Bad debts recovered A/c
This A/c can either be transferred to P& L A/c or Provisions for Doubtful Debts A/c.

239. The entry for creating a Provision for bad debts is_____________?
A. Debit Provision for Bad Debts A/c and credit Debtors A/c
B. Debit Debtors A/c and credit Provision for Bad Debts A/c
C. Debit Provision for Bad Debts A/c and credit Profit & Loss A/c
D. Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.

240. When a person purchasing goods on credit he becomes a_________in the books of the seller?
A. Debtor
B. Creditor
C. Defaulter

NOTE
IF YOU THINK ANY OF THE MCQ ABOVE IS WRONG.
PLEASE COMMENT WITH CORRECT ANSWER AND ITS DETAIL EXPLANATION IN COMMENT BOX.
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