Sinking Fund

Q.

What is the journal entry for transfer of amount to sinking fund?

1. Sinking fund a.c

2. Profit & loss a/c

3. None of these

4. Debentures a/c

Q.

Under Sinking Fund method, Sinking Fund or Debenture Redemption Fund of _______ the amount of present value of redemption amount of debentures is created out of profits every year.

1. None of the above

2. Double

3. Equal

4. Half

Q. A sinking fund is established which means they set aside the of this money to be redeemed and plan to invest it.

1. future value
2. present value
3. interest value
4. market value

Q. Which of the following statement(s) is / are false regarding accounting rate of return?
(i) Depreciation is not considered for its calculation
(ii) Depreciation is added back to the annual income
(iii) For decision making ARR of a project is compared with that of the firm or industry as a whole
(iv) If ARR is greater than one for a project it should be accepted.
(v) For calculating average annual income non-cash expenses are also deducted from sales revenue.

1. ii, iii and v only
2. i, ii and iv only
3. ii and iv only
4. iii, iv and v only

Q. If the total charge of depreciation and maintenance is considered as the method which would provide a uniform charge is?

1. Annuity method
2. Insurance policy method
3. Straight line method
4. Diminishing balance method

Q. is equal to present value multiplied by (1+r) to the power n.

1. Future value
2. Present value
3. Market value
4. Current value

Q. Which method is followed to have a uniform charge for depreciation and repair and maintenance together ?

1. Written Down Value Method
2. Straight Line Method
3. Double Declining Method
4. Sum of Years Digits Method

Q. Match List I with List II and select the correct answer using the codes given below the lists.

	List I		List II
A.	Leasehold property	1.	Depreciation Fund Method
B.	Mines, quarries etc.	2.	Annuity Method
C.	The interest lost on the acquisition of Method an asset	3.	Fixed Instalment Method
D.	To provide for replacement of assets at the end of its useful life	4.	Depletion Method

1. A - 3, B - 4, C - 1, D - 2
2. A - 3, B - 4, C - 2, D - 1
3. A - 4, B - 3, C - 1, D - 2
4. A - 2, B - 1, C - 4, D - 3