CHAPTER 7 : Depreciation, Provisions and Reserves NCERT MCQ CLASS 11TH ACCOUNTS | EDUGROWN

NCERT MCQ ON Depreciation, Provisions and Reserves:

Question 1.
Depreciation is decline in the value of ………………….Answer

Answer: Assets

---

Question 2.
Installation, freight and transport expenses are a part of ……………….Answer

Answer: Acquisition cost

---

Question 3.
Provision is a ………………. against profit.Answer

Answer: Charge

---

Question 4.
Reserve created for maintaining a stable.rate of dividend is termed as ………………….Answer

Answer: Dividend Equilisation Fund

---

State whether the following statements are True or False.

Question 1.
Depreciation is a non-cash expense.Answer

Answer: True

---

Question 2.
Depreciation is also charged on current assets.Answer

Answer: False

---

Question 3.
Depreciation is decline in the market value of tangible fixed assets.Answer

Answer: False

---

Question 4.
The main cause of depreciation is wear and tear caused by its usage.Answer

Answer: True

---

Question 5.
Depreciation must be charged so as to ascertain true profit or loss of the business.Answer

Answer: True

---

Question 6.
Depletion term is used in case of intangible assets.Answer

Answer: False

---

Question 7.
Depreciation provides fund for replacement.Answer

Answer: True

---

Question 8.
When market value of an asset is higher than book value, depreciation is not charged.Answer

Answer: False

---

Question 9.
Depreciation is charged to reduce the value of asset to its market value.Answer

Answer: False

---

Question 10.
If adequate maintenance expenditure is incurred, depreciation need not be charged.Answer

Answer: False

---