Q. The term amortization applies to decrease in book value of
✅ Correct Answer: (A)
Intangible fixed asset
Financial Accounting MCQs and Notes
Q. The term ‘depletion’ applies to decrease in value of
✅ Correct Answer: (C)
wasting asset
Q. Under diminishing balance method,
✅ Correct Answer: (B)
the amount on which deprecation is calculated falls every year
Q. If original cost of an asset is rs. 60000 and its scrap value is Rs. 10000, its depreciable cost is
✅ Correct Answer: (B)
50000
Q. When provision for depreciation account is maintained, the amount of depreciation is debited to
✅ Correct Answer: (B)
depreciation account
Q. Depreciation arises because of
✅ Correct Answer: (B)
wear and tear
Q. Loss on sale of machinery should be written off against
✅ Correct Answer: (C)
depreciation fund account
Q. Under diminishing balance method, depreciation is calculated on
✅ Correct Answer: (B)
written down value
Q. The main objective of providing depreciation is
✅ Correct Answer: (A)
To calculate true profit