XIIMT-MCQ

Choose the correct answer for each from the given option: 1. Which of the following is not required in order to calculate the straight line method of depreciation: a. The b. annual cost of repairs c. The cost of the asset

d. The expected residual value e. The useful life of the asset

2. Depreciation is: a. b. c. d.

The cost of current asset wearing away The cost of a replacement for a fixed asset The salvage value of a fixed asset plus its original cost The part of the cost of the fixed asset consumed during the period of use by the firm

3. What is the main purpose of charging depreciation: a. b. c. d.

To To To To

provide funds for asset replacement reduce the cost of repairing asset show the assets at their realizable values in the balance sheet spread the cost of an asset over its useful life

4. Which of the following is a part of revenue expenditure: a. b. c. d.

Painting the premises for first time Buying tires for a new car Painting the premises after 3 years Buying equipment for the premises

5. If someone owns a grocery store, which of the following is not capital expenditure: a. Rent b. Motor Van

c. Fixtures d. Equipment

6. If partners do not have any agreement, how should profits and losses be shared: a. b. c. d.

Equally Equally after interest has been allowed on capital In proportion to the partners individual capitals In the ratio of the partners individual capitals

7. 3 years Fire Insurance Expense is included in cost of asset a. True 8. Cost of Computer is debited to:

b. False

a. Computer Account b. Equipment Account

c. None of the above

9. Increase is Partners Account is a. Debited

b. Credited

10. If profit is given in Question then Expenses & Revenue Summary Account is Debited a. True

b. False

11. Which one of the following could not be classified as Revenue Expenditure? a. b. c. d.

Purchase of a fixed asset, by cheque Purchase of goods for resale, by cash Purchase Wages paid by cash of goods for resale, on credit Wages paid by cash

12. Which one of the following assets could be described as a current asset? a) b) c) d)

Stock of goods for resale Machinery to manufacture goods for resale Buildings to house the machinery Land on which the buildings stand

13. Which of these items would be accounted for as an expense? a) Repayment of a bank loan b) Dividends to stockholders c) The purchase of land

d) Payment of the current period's rent

14. Which of the following would not be included on a balance sheet? a) Accounts receivable b) Accounts payable

c) Sales d) Cash

15. Which one of the following tangible fixed assets would not normally be depreciated? a) Buildings that have been revalued to a lower value than their original cost b) Buildings that have been revalued to a higher value than their original cost c) Leasehold land d) Freehold land