ACCOUNTANCY FOR CLASS 11 CHAPTER 7 DEPRECIATION, PROVISIONS AND RESERVES MCQS ALONG WITH ANSWERS

Free CBSE Accountancy Multiple Choice Questions for Class 11 along with answers Chapter 7: Depreciation, Provisions and Reserves. Accountancy MCQs for Class 11 chapter-wise with answers are prepared based on the current exam pattern. Students can tackle MCQs with answers to realise their spadework level.

1. Under which depreciation method does the amount of depreciation expenses remains the same throughout the useful life of a fixed asset?

(a) Reducing balance method

(b) Number of units produced method

(c) Machine hours method

(d) Straight-line method

Answer: (d) Straight-line method

2. Depreciation helps in determining ________.

(a) Increases the value of the asset

(b) Revenue generation

(c) Increase the burden of tax

(d) Accurate level of profit

Answer: (d) Accurate level of profit

3. Depreciation charged under diminishing method ________.

(a) Decrease every year

(b) Increase in one year and decrease another year

(c) Same every year

(d) Increase every year

Answer: (a) Decrease every year

4. Every fixed asset loses its value due to use or other reasons. This decline in the value of assets is known as ________.

(a) Provisions

(b) Depreciation

(c) Devaluation

(d) Amortisation

Answer: (b) Depreciation

5. At the end of the year, the depreciation account is transferred to _______.

(a) Trading account

(b) Profit and loss appropriation account

(c) Profit and loss account

(d) Balance sheet

Answer: (c) Profit and loss account

6. According to the 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 the Companies Act

Answer: (b) Banking and insurance companies

7. Which of the following is the example of the 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

Answer: (c) Investment fluctuation fund

8. Which of the following methods of depreciation is not recognised by Income Tax Law?

(a) Straight-line method

(b) Diminishing balance method

(c) Both straight-line and diminishing balance methods

(d) None of the above

Answer: (a) Straight-line method

9. Which of the following is the example of capital reserve?

(a) Workmen’s compensation fund

(b) General reserve

(c) Premium received on the issue of shares or debentures

(d) None of the above

Answer: (c) Premium received on the issue of shares or debentures

10. The loss on sale of an asset is debited to _______.

(a) Profit and loss account

(b) Trial balance credit side

(c) Balance sheet

(d) Trading account

Answer: (a) Profit and loss account

11. Provision is created by debiting _______.

(a) Profit and loss account

(b) Trading account

(c) Profit and loss appropriation account

(d) None of the above

Answer: (a) Profit and loss account

12. Asset disposal A/c is prepared when _______.

(a) Provision for depreciation A/c is prepared

(b) Asset A/c is prepared

(c) Profit and loss A/c is prepared

(d) Depreciation A/c is prepared

Answer: (a) Provision for depreciation A/c is prepared

13. Depreciation is charged on _________.

(a) Current assets

(b) Fixed tangible assets

(c) Both current and fixed assets

(d) None of the above

Answer: (b) Fixed tangible assets

14. The depreciation charged on an asset will be credited to ________.

(a) Depreciation A/c

(b) Asset A/c

(c) Bank A/c

(d) Cash A/c

Answer: (b) Asset A/c

15. Following are the causes of depreciation except _________.

(a) Wear and tear due to use or passage of time.

(b) Normal factors

(c) Expiration of legal rights

(d) Obsolescence

Answer: (b) Normal factors

We trust that the offered Accountancy MCQs for Class 11 with responses Chapter 7: Depreciation, Provisions and Reserves will help you. Assuming you have any questions with respect to CBSE Class 11 Accountancy, Depreciation, Provisions and Reserves MCQs, drop a remark underneath, and we will hit you up at the most punctual.

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