Depreciation

Q.

What is the entry for adjusting depreciation of an asset?

1. Depreciation A/c Dr

   To Asset A/c

2. No entry

3. None of these

4. Asset A/c Dr

   To Depreciation A/c

Q.

If a company revises the estimated useful life of one of its assets being depreciated, the company will need to reissue its earlier financial statements as the earlier depreciation was incorrect & will have to prepare all its books of accounts again.

1. True

2. Can't say

3. None of the above

4. False

Q.

Reduction in the book value of an asset over a period of time is called-

1. Proportion

2. Appreciation

3. Depreciation

4. Depletion

Q.

What are the causes of providing depreciation?

1. Use of asset

2. Passage of time

3. Obsolescence

4. All of the above

Q.

Depreciation arises because of …………..

1. Wear & Tear

2. Increase in value of asset

3. Increase in the value of liability

4. Decrease in capital

Q.

Which of the following are depreciable assets

1. Debtors

2. Cash

3. Building

4. Prepaid expenses

Q. Depreciation is a/an for the business entity.

1. asset
2. liability
3. expense
4. revenue

Q. Reduction in the book value of an asset over a period of time is called depreciation.

1. True
2. False

Q. Which of the following assets are depreciable?

1. Cash
2. Stock
3. Prepaid expenses
4. Debtors
5. Machinery
6. Computers
7. Buildings
8. Vehicles
9. Goods

Q. Depreciation of assets occurs due to passage of time, obsolescence, and wear and tear.

1. False
2. True