(a) Capital Expenditure
(b) Revenue Expenditure
(c) Deferred Revenue Expenditure
(d) Both Capital and Deferred Revenue Expenditure
3. On 1st July, 2020 Aqua Ltd purchased Machinery of ₹4,00,000. Depreciation is to be charged @10% p.a by diminishing balance method. What amount of depreciation will be charged for the year ending March 31, 2021?
4. Bank Reconciliation Statement is prepared to reconcile _________ and ________ balances.
6. Assertion (A) :- Capital Expenditure are recurring in nature Reason (R) :- Capital Expenditure are incurred to increase the earning capacity.
9. If Depreciation is not charged in a particular year, then what will be the effect on the books of Accounts?
15. Statement that explains the causes of difference between bank balance of the cash-book and bank statement is called
19. Statement I: - In Straight Line Method, the asset will be completely written off. Statement II: - In Written Down value Method, the asset will not be completely written off.
20. When Bank Reconciliation Statement is prepared with Credit balance as per Pass Book, the Balance derived will be :-
(a) Routine Advertisement Expenditure
(b) Advertisement for launching a new product
(c) Delivery Van purchased
(d) Salary to Employees
3. On 1st July, 2020 Aqua Ltd purchased Machinery of ₹4,00,000. Depreciation is to be charged @10% p.a by diminishing balance method. What amount of depreciation will be charged for the year ending March 31, 2021?
(a) ₹40,000
(b) ₹20,000
(c) ₹30,000
(d) ₹70,000
(a) Cash Book and Ledger Accounts
(b) Pass Book and Ledger Accounts
(c) Cash Book and Pass Book
(d) Cash Book and Vouchers
(a) Salary for previous year paid in current year
(b) Advertisement for launching a new product
(c) Repayment of Loan
(d) Building purchased
6. Assertion (A) :- Capital Expenditure are recurring in nature Reason (R) :- Capital Expenditure are incurred to increase the earning capacity.
(a) Both A and R are correct and R is the correct explanation of A,
(b) Both A and R are correct but R is not the correct explanation of A.
(c) A is correct but R is incorrect.
(d) A is incorrect but R is correct.
(a) Depreciation is charged on remaining book value every year.
(b) Depreciation is charged only for half of the year.
(c) Depreciation is charged on cost price of asset every year.
(d) Book value of Asset will never be zero
(a) Sale of old Newspaper
(b) Sale of Machinery
(c) Loan taken from Bank
(d) Capital introduced by proprietor
9. If Depreciation is not charged in a particular year, then what will be the effect on the books of Accounts?
(a) Profits will be higher
(b) Profits will be lesser
(c) Assets can’t be shown in books of the firm
(d) Accounts can’t be prepared
(a) Only Market value is affected Page 3 of 12
(b) Only Book Value is affected
(c) Both market value and book value is affected
(d) Neither market value nor book value is affected
(a) Outflow of Cash
(b) Sale of Assets
(c) Decrease in book value of Assets
(d) Increase in market value of Assets
(a) Only Tangible Assets
(b) Only Intangible Assets
(c) Both Tangible and Intangible Assets
(d) Only Current Assets
Reason (R) :- Depreciation is charged on original cost of Asset every year under straight line method.
(a) Both A and R are correct and R is the correct explanation of A,
(b) Both A and R are correct but R is not the correct explanation of A.
(c) A is correct but R is incorrect.
(d) Both A and R are incorrect
15. Statement that explains the causes of difference between bank balance of the cash-book and bank statement is called
(a) Bank Statement
(b) Pass Book
(c) Expenses Statement
(d) Bank Reconciliation Statement
(a) Bank
(b) Guarantor
(c) Account Holder
(d) Government
(a) Capital Expenditure gives benefits for short period of time
(b) Revenue Expenditure gives benefits for long period of time
(c) Office Premises purchased is Capital Receipt
(d) Rent paid is Revenue Expenditure
18. Which if the following is not a factor affecting depreciation?
(a) Cost of Asset
(b) Scrap Value
(c) Useful Life of Asset
(d) Market Value of Asset
19. Statement I: - In Straight Line Method, the asset will be completely written off. Statement II: - In Written Down value Method, the asset will not be completely written off.
(a) Only Statement I is true.
(b) Only Statement II is true.
(c) Both Statements are true.
(d) Both Statements are false.
20. When Bank Reconciliation Statement is prepared with Credit balance as per Pass Book, the Balance derived will be :-
(a) Credit Balance as per Cash Book
(b) Debit Balance as per Cash Book
(c) Debit Balance as per Pass Book
(d) Either (a) or (b) is possible
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