Quiz
Depreciation
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Questions in this quiz (12)
1What is depreciation?
- Athe loss of value of an asset after you purchase it.
- Bthe measure of the loss in value of a fixed asset over its useful economic life.
- Cthe cost price minus the reselling price.
2When estimating depreciation, the business will take into consideration the estimated residual value of the asset.
- ATrue
- BFalse
3Straight Line method of depreciation [blank_start]reduces[blank_end] the value of the [blank_start]asset[blank_end] by the [blank_start]same[blank_end] amount each year.
- Asame
- Basset
- Creduces
4[blank_start]Reducing Balance[blank_end] method of depreciation reduces the value of the asset by a smaller amount each year.
- AReducing Balance
5The main causes of depreciation are;
- ANatural usage (wear and tear)
- BAn unwanted asset
- CObsolescence
- DEnd of useful economic life
- EPassage of time
- FAll of the above
6If depreciation is not charged, profits will be overstated and the balance sheet will not show the true value of the asset.
- ATrue
- BFalse
7Depreciation is an expense.
- ATrue
- BFalse
8Depreciation effects the Balance Sheet
- ATrue
- BFalse
9Reducing Balance method illustrated on a graph will have an upward slope.
- ATrue
- BFalse
10Disposal of an asset effects the following account(s);
- AProfit & Loss
- BBalance Sheet
- CAsset Account
- DSales Account
- EProvision for Depreciation Account
- FDisposal Account
- GAll of the above
11When calculating depreciation, you must only take into consideration the year the item was purchase or sold.
- ATrue: the depreciation is charged on a yearly basis
- BFalse: you must take into consideration the month the item was purchased or sold.
12The Trade-in Allowance will effect your profits for the year.
- ATrue
- BFalse
Information
- Description
- Quiz on depreciation
- Author
- Ciara Mooney
- Language
- English
- Views
- 93
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- Rating
- 5.0 out of 5 · 2 ratings Rate this quiz