Assertion Resaon MCQs of Depreciation Class 11 with Answers
Assertion Resaon MCQs of Depreciation Class 11 with Answers for CBSE, ISC and State Boards
Assertion (A): Depreciatoin is the decline in the book value of tangible fixed assets (except land).
Reason (R): Such decline is of a temporary nature.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (c)
Assertion (A): Depreciation is the permanent fall in the market value of Fixed Asset.
Reason (R): Depreciation Accounting is the process of valuation and not allocation.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (d)
Assertion (A): Depletion is the decrease in the value of wasting assets
Reason (R): Depletion is used to measure and record the exhaustion of natural resources
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (a)
Assertion (A): Land is not a depreciable asset.
Reason (R): Its useful life is not limited to few years.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (b)
Assertion (A): Amortisation is a gradual and systematic writing-off of intangible assets over its estimated useful life.
Reason (R): Patents are amortised being intangible assets
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (a)
Assertion (A): Depreciation is allocation of cost of asset over its estimated useful life.
Reason (R): By charging depreciation, cost of fixed asset is written off over the estimated useful life of the asset.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (b)
Assertion (A): Diminising balance method of charging depreciation is superior to straight line method of depreciation.
Reason (R): Income tax authorities allow for diminishing balance method.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (a)
Assertion (A): Depreciation is a charge against profit and is deducted before determining net profit.
Reason (R): Depreciation is an expense as any other expense incurred in the normal course of business like salary, postage, stationery, etc.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (b)
Assertion (A): Repairs to second had machinery purchased before it is put to use are capitalized.
Reason (R): All expenses incurred on asset before it is put to use are capital expenditure.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (a)
Assertion (A): Charging depreciation is important to present true and fair value of financial position.
Reason (R): If depreciation on assets is not provided, the assets will be overstated.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (a)
Assertion (A): Depreciation under fixed instalment method is calculated on each year’s opening balance of the asset.
Reason (R): Depreciation under diminishing balance method is calculated on book value of the asset.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (d)
Assertion (A): Depreciation provides funds for replacement of fixed asset.
Reason (R): The amount charged as depreciation is retained in the business and is available for replacement of fixed asset when its useful life is over.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (b)
Assertion (A): Scrap value is an estimated realisable value of the asset at the end of its economic life.
Reason (R): Under reducing balance method, depreciation is calculated by applying the rate of depreciation on the book value of the asset (without deducting scrap value).
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (b)
Assertion (A): Depreciation is non-cash and non-operating expenses which is to be provided for if there are profits.
Reason (R): Depreciation is non-cash but operating expense which is to be provided for whether there is profit or loss.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (c)
Assertion (A): Depreciation is a process f allocation of the cost of an asset to its effective span of life.
Reason (R): Depreciation is a process of valuation of asset.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (c)
Assertion (A); Fixed Assets are stated in the Balance Sheet at their market value.
Reason (R): Fixed Assets are stated in the Balance Sheet at their cost less depreciation.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (c)
Assertion (A): Depreciation decreases only the book value of the asset, not the market value.
Reason (R): Depreciation cannot be provided in case of loss in a financial year.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (c)
Assertion (A): If market value of a fixed asset is higher that its cost hen Depreciation need not be provided.
Reason (R): Depreciation needs to be provided since Depreciation is not related to fluctuations in market price.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (c)
Assertion (A): In reducing instalment method, the rate of depreciation gets reduced every year.
Reason (R): In case of reducing instalment method, the balance of asset is never reduced to zero level
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (d)
Assertion (A): Under Written Down Value Method, the amount of depreciation decreases every year.
Reason (R): In Written Down Value Method, a fixed rate is applied on reduced balance every year. As a result, the amount of depreciation decreases every year.
Option:
(a) Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A)
(c) Assertion (A) is not correct but the Reason (R) is correct
(d) Both, Assertion (A) and Reason (R) are incorrect
Ans – (b)
Assertion (A): It is not necessary to provide depreciation on plant and machinery when its market value is higher than its book value.
Reason (R): Charing depreciation is compulsory and not voluntary.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (d)
Assertion (A): Depreciation is Revenue Expenditure.
Reason (R): Depreciation is Deferred Revenue Expenditure
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (c)
Assertion (A): Depreciation arises due to wear and tear and passage of time.
Reason (R): Depreciation also arises due to fall in the market value of the asset.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (c)
Assertion (A): GST Paid (except on Vehicles) does not have any impact on the amount or rate of depreciation.
Reason (R): GST Paid (except on Vehicles) does not affect depreciation becuase it is not a cost of the asset. It is set off against GST collected.
Options:
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true
Ans – (a)
