MCQs of Depreciation Class 11 with Answers
MCQs of Depreciation Class 11 with Answers for CBSE, ISC and State Boards
Depreciation is charged on
(a) Current Assets
(b) Investments
(c) Intangible Assets
(d) Fixed Assets
Ans – (d)
Characteristic of Depreciation is:
(a) Decline in the value of assets
(b) Depreciation is of permanent nature
(c) Depreciation is a non-cash expense
(d) All of the above
Ans – (d)
Depreciation arises because of:
(a) Obsolescence
(b) Constant use of assets
(c) Expiry of time
(d) All of the above
Ans – (d)
Depreciation is charged due to
(a) wear and tear
(b) inflation
(c) fall in the market value of the asset
(d) increase in the market value of the asset
Ans – (a)
Depreciable cost of an asset under Straight Line Method is
(a) Cost + Net Residual Value
(b) Cost – Net Residual Value
(c) Cost – Depreciation
(d) None of these
Ans – (b)
Depreciation for business is:
(a) Expense
(b) Income
(c) Gain
(d) Liability
Ans – (a)
Factors taken into consideration for providing depreciation are:
(a) Total cost of the asset
(b) Estimated useful life of the asset
(c) Estimated Scrap value of the asset
(d) All of the above
Ans – (d)
Which asset is not depreciated?
(a) Freehold Land
(b) Plant
(c) Machinery
(d) Furniture
Ans – (a)
Depreciation in the value of asset is:
(a) Permanent decrease
(b) Temporary decrease
(c) Seasonal decrease
(d) None of these
Ans – (a)
Depreciation is provided on:
(a) Current Assets
(b) Fictitious Asset
(c) Fixed Assets
(d) Intangible Assets
Ans – (c)
Depreciation is the
(a) residual value of a fixed asset
(b) amount of cash set aside to buy fixed asset
(c) written down value of a fixed asset
(d) cost of fixed asset allocated as expense over its expected useful life
Ans – (d)
Depreciation
(a) is provided only in case of profit
(b) is not provided in case of loss
(c) is provided irrespective of the fact whether profit is earned or loss is incurred
(d) is provided if the market value of the asset exceeds the cost of the asset
Ans – (c)
Cost of fixed asset less its accumulated depreciation is equal to the __ value.
(a) capitalised
(b) book
(c) scrap
(d) market
Ans – (b)
Depreciation under fixed instalment method is calculated:
(a) On the purchase price of the asset
(b) On the closing balance of the asset
(c) On each year’s opening balance of the asset
(d) On the market price of the asset
Ans -(a)
Depreciation under diminishing balance method is calculated:
(a) On the purchase price of the asset
(b) On the closing balance of the asset
(c) On each year’s opening balance of the asset
(d) On the market price of the asset
Ans – (c)
Diminishing Value Method (WDV) means a method by which
(a) the rate of depreciation falls year by year
(b) the amount of depreciation is calculated on Cost less Depreciation already charged
(c) the rate as well as the amount to which it is applied falls year by year
(d) the amount on which depreciation is provided remains constant every year
Ans – (b)
Depreciation arises due to:
(a) Fluctuations
(b) Fall in the value of money
(c) Temporary fall in the market value of asset
(d) Physical wear and tear
Ans – (d)
Main object of charging depreciation is:
(a) Ascertaining true profit or loss
(b) Ascertaining true financial position
(c) Ascertaining true cost of production
(d) All of the above
Ans – (d)
Straight Line Method (SLM) of depreciation is a method under which depreciation is charged.
(a) at a fixed percentage on the book value of the asset
(b) at a fixed percentage on the original cost of the asset
(c) on original cost of asset but the depreciation rate changes
(d) at the fixed rate on the increased value
Ans – (b)
Depreciation is the process of:
(a) Valuation of asset
(b) Allocation of the cost of asset
(c) Valuation and allocation of the cost of asset
(d) None of the above
Ans – (b)
Merit of reducing instalment method is:
(a) Easy calculation
(c) Equal burden on profit and loss account each year
(c) Approved by Income Tax Authorities
(d) All of the above
Ans – (d)
Which of the following information is not required for calculating depreciation in Straight Line Method?
(a) The cost of fixed asset
(b) The estimated useful life
(c) The estimated residual value
(d) The accumulated depreciation from the previous accounting periods
Ans – (d)
A machine is purchased for ₹ 80,000 and its installation charges are ₹ 10,000. If its scrap value is ₹ 6,000 and effective life is 10 years, its yearly depreciation as per fixed instalment method will be:
(a) ₹ 8,600
(b) ₹ 9,600
(c) ₹ 8,400
(d) ₹ 9,000
Ans – (c)
Purchase price of a machine is ₹ 2,00,000 and its installation charges are ₹ 30,000. Its scrap value is $ 5,000. if it is depreciated @ 10% p.a. on diminishing balance method, the depreciation in the first year will be:
(a) ₹ 23,000
(b) ₹ 22,500
(c) ₹ 23,500
(d) ₹ 16,500
Ans – (a)
The amount of depreciation charged on machinery is debited to
(a) Depreciation Account
(b) Machinery Account
(c) Provision for Depreciation Account
(d) Repairs Account
Ans – (a)
Asset Disposal Account is prepared
(a) at the time of purchase of an asset
(b) at the time of sale of an asset
(c) when the scrap value of asset is zero
(d) Both (a) & (b)
Ans – (b)
On purchase of an asset, account debited is:
(a) Purchases A/c
(b) Assets A/c
(c) Depreciation A/c
(d) Goods A/c
Ans – (b)
On purchase of an asset, amount spent on its carriage is debited to:
(a) Purchases A/c
(b) Carriage A/c
(c) Asset A/c
(d) Installation Expenses A/c
Ans – (c)
Depreciation charged if credited in Asset Account, the asset is shown
(a) at original cost less depreciation
(b) at Book value less depreciation
(c) at market value
(d) at realisable value
Ans – (b)
Depreciation charged if credited to Provision for Depreciation Account, the asset is shown
(a) at cost
(b) at cost less depreciation
(c) at market value
(d) at realisable value
Ans – (a)
On sale of an asset, account credited is:
(a) Asset A/c
(b) Sale A/c
(c) Goods A/c
(d) Profit & Loss A/c
Ans – (a)
Depreciation charged at the end of the year will be debited to:
(a) Asset A/c
(b) Purchases A/c
(c) Goods A/c
(d) Depreciation A/c
Ans – (d)
Amortisation means writing off __ assets.
(a) Tangible
(b) Intangible
(c) Fictitious
(d) Wasting
Ans – (b)
Depreciation is a process of
(a) valuation of asset
(b) allocation of cost of asset to expense
(c) both valuation of asset and allocation of cost
(d) allocation of expense
Ans – (b)
Depreciation charged at the end of the year will be credited to:
(a) Asset A/c
(b) Depreciation A/c
(c) Profit and Loss A/c
(d) Goods A/c
Ans – (a)
Loss on sale of asset is debited to:
(a) Depreciation A/c
(b) Asset A/c
(c) Profit and Loss A/c
(d) Sales A/c
Ans – (c)
A fixed asset costs ₹ 80,000. It is sold for ₹ 48,000. On the date of its sale, its book value is ₹ 30,000. What is the gain or loss on sale?
(a) Loss : ₹ 2,000
(b) Loss : ₹ 18,000
(c) Gain : ₹ 18,000
(d) Gain : ₹ 2,000
Ans – (c)
On 1st October 2021, a machine is purchased for ₹ 3,60,000 and ₹ 40,000 are spent on its installation. Depreciation is charged @ 10% p.a. on original cost method. Books are closed on 31st March each year. On 31st March, 2023 depreciation charged will be:
(a) ₹ 20,000
(b) ₹ 40,000
(c) ₹ 38,000
(d) ₹ 36,000
Ans – (b)
On 1st July 2020, a machine is purchased for ₹ 1,75,000 and ₹ 25,000 are spent on its installation. Depreciation is charged @ 10% p.a. on diminishing balance method. Books are closed on 31st March each year. On 31st March, 2023 depreciation charged will be:
(a) ₹ 18,500
(b) ₹ 18,000
(c) ₹ 16,200
(d) ₹ 16,650
Ans – (d)
A vehicle costs ₹ 30,000. The vehicle was later sold for ₹ 9,000 and profit on sale was ₹ 1,500. What is the accumulated depreciation of vehicle on the date of sale?
(a) ₹ 9,000
(b) ₹ 7,500
(c) ₹ 21,000
(d) ₹ 22,500
Ans – (d)
On 1st July 2021 a machine is purchased for ₹ 6,00,000. Depreciation is charged @ 10% p.a. on original cost method on 31st March each year. Depreciation charged on 31st March 2023 will be:
(a) ₹ 60,000
(b) ₹ 45,000
(c) ₹ 55,500
(d) ₹ 54,000
Ans – (a)
On 1st October 2021, a machine is purchased for ₹ 10,00,000. Depreciation is charged @ 15% p.a. on diminishing balance method on 31st March each year. The amount of depreciation on 31st March 2023 will be:
(a) ₹ 1,27,500
(b) ₹ 1,44,375
(c) ₹ 69,375
(d) ₹ 1,38,750
Ans – (d)
Book value of machinery on 31st March, 2025 is ₹ 32,40. This machinery was purchased on 1st April, 2023. Depreciation is charged @ 10% p.a. by diminishing balance method. Cost of the machine as on 1st April, 2023 was
(a) ₹ 40,500
(b) ₹ 36,000
(c) ₹ 42,000
(d) ₹ 40,000
Ans – (d)
On 1st April 2021 a machinery is purchased for ₹ 2,00,000. Depreciation is charged @ 10% p.a. on original cost method and books are closed on 31st December every year. On 1st July 2023 the machinery is sold for ₹ 1,20,000. Loss on sale will be:
(a) ₹ 30,000
(b) ₹ 35,000
(c) ₹ 40,000
(d) ₹ 25,000
Ans – (b)
A machinery which costs ₹ 2,00,000 is depreciated @ 25% p.a. using the Written Down Value Method. At the end of three years, it will have a book value of
(a) ₹ 1,50,000
(b) ₹ 84,375
(c) ₹ 1,12,500
(d) ₹ 74,375
Ans – (b)
On 1st April 2021 a machinery is purchased for ₹ 4,00,000. Depreciation is charged @ 10% p.a. on diminishing balance method and books are closed on 31st December every year. On 1st July 2023, the machinery is sold for ₹ 1,80,000. Loss on sale will be:
(a) ₹ 1,53,000
(b) ₹ 1,19,700
(c) ₹ 1,36,350
(d) ₹ 1,27,800
Ans – (c)
A firm purchased on 1st April 2021 a second-hand machinery for ₹ 50,000 and spent ₹ 10,000 on its installation. On 1st July in the same year additional machinery was purchased for ₹ 20,000. Depreciation is provided each year on 31st December @ 5% p.a. on written down value of the asset. The amount of depreciation in the first year will be:
(a) ₹ 4,000
(b) ₹ 3,250
(c) ₹ 3,500
(d) ₹ 2,750
Ans – (d)
On 1st July 2021, a firm purchased a machinery for ₹ 4,00,000. On 1st October in the same year additional machinery was purchased for ₹ 1,00,000. Depreciation is provided each year on 31st December @ 10% p.a. on written down value of the asset. The amount of depreciation in the second year will be:
(a) ₹ 45,000
(b) ₹ 47,750
(c) ₹ 47,000
(d) ₹ 45,750
Ans – (b)
When ‘Provision for Depreciation A/c’ is created, the amount of depreciation is:
(a) Debited to Provision for Depreciation A/c
(b) Credited to Provision for Depreciation A/c
(c) Debited to Asset A/c
(d) Credited to Asset A/c
Ans – (b)
What is the amount of difference between the closing balances of two machines after two years is both machines were purchased on the same date with the same amount i.e., for ₹ 1,00,000? Machine I is depreciated by 20% p.a. on Straight Line Method and Machine II is depreciated by 20% p.a. on Diminishing Balance Method:
(a) Value of Machine II is more by ₹ 2,000
(b) Value of Machine I is more by ₹ 4,000
(c) Value of Machine II is more by ₹ 4,000
(d) Value of Machine II is less by ₹ 2,000
Ans – (c)
If the Machinery Account has a balance of ₹ 40,000 and the Accumulated Depreciation Account has a balance of ₹ 18,500, the book value of machinery is
(a) ₹ 21,500
(b) ₹ 40,000
(c) ₹ 18,500
(d) ₹ 58,500
Ans – (a)
Trial Balance shows that Furniture Account has balance of ₹ 15,000 and Provision for Depreciation on Furniture Account has balance of ₹ 4,000. Furniture is depreciated at the rate of 25% using the Reducing Balance Method.
What is the written down value of furniture at the end of the accounting period?
(a) ₹ 11,000
(b) ₹ 8,250
(c) ₹ 12,250
(d) ₹ 11,250
Ans – (b)
Ambuja Cement Ltd. purchased a machine on 1-1-2022 for ₹ 1,20,000. Installation expenses were ₹ 10,000. Its residual value after 10 years is ₹ 5,000. On 1-03-2022 expenses on its repairs were incurred to the extent of ₹ 2,000. Depreciation is provided under straight line method. Books are closed on 31st March every year. The amount of depreciation for the current year will be:
(a) ₹ 3,125
(b) ₹ 3,175
(c) ₹ 12,500
(d) ₹ 12,700
Ans – (a)
The balance of machine on 31st March, 2023 is ₹ 97,200. The machine was purchased on 1st April 2021. Depreciation is charged @ 10% p.a. by diminishing balance method. The cost price of the machine as on 1st April 2021 would be:
(a) ₹ 1,00,000
(b) ₹ 1,20,000
(c) ₹ 1,08,000
(d) ₹ 1,32,000
Ans – (b)
Original cost of an asset is ₹ 4,80,000; Salvage value is 25% of the Cost of the asset; Useful Life is 10 Years. The rate of depreciation under Straight Line Method will be:
(a) 10% p.a.
(b) 9% p.a.
(c) 8% p.a.
(d) 7.5% p.a.
Ans – (d)
In the books of D Ltd. the Machinery Account shows a debit balance of ₹ 60,000 as on April 1, 2022 and Provision for Depreciation A/c at ₹ 24,000. The machinery was sold on September 30, 2022 for ₹ 30,000. The company charges depreciation @ 20% p.a on diminishing balance method. Profit/Loss on sale of the machinery is:
(a) ₹ 1,200 profit
(b) ₹ 2,400 Loss
(c) ₹ 2,400 Profit
(d) ₹ 1,200 Loss
Ans – (b)
What will be the percentage of depreciation under SLM in the following case:
Original Cost of Machine – ₹ 1,50,000
Salvage value after 9 years – ₹ 15,000
Repair charges in 2nd year – ₹ 10,000
(a) 11.11%
(b) 10%
(c) 10,34%
(d) 9,37%
Ans – (b)
A machinery costing ₹ 3,00,000 has an estimated useful life of 10 years. At the end of 10 years, its estimated scrap value is $ 50,000. The annual depreciation by Straight Line Method would be
(a) ₹ 33,000
(b) ₹ 30,000
(c) ₹ 35,000
(d) ₹ 25,000
Ans – (d)
A business purchased a crane for ₹ 40,000 on 1st April, 2022. The crane was depreciated at the rate of 30% per annum using the reducing balance method. The crans was sold on 31st March, 2025 at ₹ 7,750. What was the profit or loss on disposal?
(a) ₹ 750 loss
(b) ₹ 750 profit
(c) ₹ 5,970 loss
(d) ₹ 5,970 profit
Ans – (c)
Which one of the following is not a feature of written down value method of depreciation?
(a) The book value of the asset becomes zero at any one point of time
(b) The depreciation is calculated on the book value of assets and not on the cost
(c) The amount of depreciation charged on a specific asset reduces every year
(d) It is not approved by Income-tax authorities
Ans – (a)
Which of the following best describes the “Depreciation”?
(a) Valuation of fixed asset at the end of the year
(b) Verification of assets
(c) Allocation of cost of fixed assets over its useful life
(d) Decreasing the market value of asset
Ans – (c)
A machine was purchased on 1st April 2022 for ₹ 5,00,000 and on 1st October, 2022 a new machine is added for ₹ 2,00,000. Calculate the balance of machine account, if depreciation is charged at 20% p.a. on written down value method for the year ending March 31, 2023.
(a) ₹ 6,00,000
(b) ₹ 5,60,000
(c) ₹ 6,60,000
(d) ₹ 5,80,000
Ans – (d)
Amortisation refers to writing off _ .
(a) Depleting Assets
(b) Wasting Assets
(c) Intangible Assets
(d) Fictitious Assets
Ans – (c)
A machine is bought for ₹ 5,40,000 plus ₹ 90,000 installation costs. It is to be depreciated on a reducing balance basis using a rate of 60% p.a. What is the depreciation to be charged in the second year of the asset ownership?
(a) ₹ 3,78,000
(b) ₹ 1,29,600
(c) ₹ 1,51,200
(d) ₹ 2,52,000
Ans – (c)
The Plant Account of Hira Ltd. is shown below:
Plant Account (at Cost)
| Date | Particulars | ₹ | Date | Particulars | ₹ |
| 2024 April 1 | To Balance b/d (Plant Purchased on 1st April, 2021) | 3,80,000 | 2025 Jan. 1 | By Plant Disposal A/c (Cost of Plant Sold) | 30,000 |
| July 1 | To Bank A/c (Plant Purchased) | 51,000 | March 31 | By Balance c/d | 4,01,000 |
| 4,31,000 | 4,31,000 |
Depreciation on plant is charged @ 20% p.a. on Straight Line Method.
What will be the company’s total depreciation charged for the year ended 31st March, 2025?
(a) ₹ 77,050
(b) ₹ 79,150
(c) ₹ 82,150
(d) ₹ 74,050
Ans – (c)
Depreciation is calculated from the date of _ .
(a) Purchase of asset
(b) Receipt of asset at business premises
(c) Asset put to use
(d) Asset installed
Ans – (c)
A Ltd. purchased a machine on 1.1.2022 for ₹ 1,20,000. Installation expenses were ₹ 30,000. Residual value after 5 years ₹ 5,000. On 1.7.2022 expenses for repair were incurred to the extent of ₹ 2,000. Depreciation is provided @ 10% p.a. under written down value method. Accounts are closed on 31st December every year. Total depreciation after 2nd year
(a) ₹ 25,000
(b) ₹ 13,000
(c) ₹ 10,500
(d) ₹ 28,500
Ans – (d)
The W.D.V of an asset after three years of depreciation on reducing balance method @ 10% p.a. is ₹ 1,45,800. What was its original value?
(a) ₹ 1,80,000
(b) ₹ 2,00,000
(c) ₹ 1,89,540
(d) ₹ 1,62,000
Ans – (b)
On 1st April, 2022 a machine is purchased for ₹ 1,00,000 and CGST and SGST are paid @ 9% each. Depreciation is provided @ 10% p.a. Depreciation for the year ending 31st March 2023 will be:
(a) ₹ 11,800
(b) ₹ 10,900
(c) ₹ 10,000
(d) ₹ 8,200
Ans – (c)
Following information is extracted from the books of a business:
| 31st March, 2024 (₹) | 31st March, 2025 (₹) | |
| Fixed Assets (At Cost) Less: Accumulated Depreciation | 2,30,000 85,000 | 2,75,000 98,000 |
Further information for the year ended 31st March, 2025 is as follows:
| Depreciation charged in the Profit & Loss Account | ₹ 25,000 |
| Addition to Fixed Assets (at cost) | ₹ 60,000 |
| Loss on Sale of Fixed Assets | ₹ 1,000 |
How much was received from the sale of Fixed Assets?
(a) ₹ 2,000
(b) ₹ 3,000
(c) ₹ 4,000
(d) ₹ 5,000
Ans -(a)
On 1st April, 2022 a Motor Car is purchased for ₹ 20,00,000. CGST and SGST are paid @ 9% each. Depreciation is provided @ 10% p.a. Depreciation for the year ending 31st March 2023 will be:
(a) ₹ 2,36,000
(b) ₹ 2,18,000
(c) ₹ 2,00,000
(d) ₹ 1,64,000
Ans – (a)
Which of the following is not a cause of depreciation?
(a) Obsolescence
(b) Fall in the Market Value
(c) Wear and Tear
(d) Passage of Time
Ans – (b)
Factors taken into consideration for providing depreciation on a new machinery are __ .
(1) Cost of the asset
(2) Cost incurred on maintenance of asset
(3) Estimated useful life of the asset
(4) Estimated Scrap value of the asset
Choose the correct option:
(a) 1, 2 and 3 are correct
(b) 1,3 and 4 are correct
(c) 2,3 & 4 correct
(d) All of the above
Ans – (b)
Cost of Machinery is ₹ 60,000. Useful life is 5 years. Annual depreciation on machine under straight lime method is ₹ 10,000. The scrap value of machine will be:
(a) ₹ 60,000
(b) ₹ 10,000
(c) ₹ 50,000
(d) ₹ 70,000
Ans – (b)
Which of the following is not a one sided error?
(a) Sales book is undercasted by ₹ 5,000
(b) Wrong carry forwarding in purchases book by ₹ 2,000
(c) Wrong balancing is sale return book by ₹ 1,000
(d) Purchase of goods for ₹ 500, recorded as ₹ 5,000
Ans – (d)
