Question 1

Provision for depreciation account appears on the _____

Accepted Answer

A) Asset side 
B) Liability side 
C) P & L account debit side 
D) P & L account credit side 
A) Asset side 
B) Liability side 
C) P & L account debit side 
D) P & L account credit side

Question 2

Shares having preferential right as to dividend and repayment of capital are termed as in

Accepted Answer

A) Equity shares 
B) Preference Shares 
C) Right Issue 
D) Issue of Bonus shares 
A) Equity shares 
B) Preference Shares 
C) Right Issue 
D) Issue of Bonus shares

Question 3

A share of a public company is:

Accepted Answer

A) Non-refundable 
B) Non-transferable 
C) Transferable 
D) Not allottable 
A) Non-refundable 
B) Non-transferable 
C) Transferable 
D) Not allottable

Question 4

A reserve created for redemption of debentures at a future date:

Accepted Answer

A) Debentures Sinking Fund 
B) Debentures Redemption Reserve 
C) Profit & Loss Appropriation Account 
D) Suspense Account 
A) Debentures Sinking Fund 
B) Debentures Redemption Reserve 
C) Profit & Loss Appropriation Account 
D) Suspense Account

Question 5

Provision for Depreciation is

Accepted Answer

A) An appropriation of profit 
B) A charge against the profit 
C) Accumulation of reserves 
D) Writing of losses 
A) An appropriation of profit 
B) A charge against the profit 
C) Accumulation of reserves 
D) Writing of losses

Question 6

A new company set up by existing companies with five year track record can issue share at premium provided:

Accepted Answer

A) Participation of existing companies are not less than 50% 
B) Prospectus contains justification for issue price 
C) The issue price is made applicable to all new investors uniformly 
D) All the above 
A) Participation of existing companies are not less than 50% 
B) Prospectus contains justification for issue price 
C) The issue price is made applicable to all new investors uniformly 
D) All the above

Question 7

Debenture is a part of:

Accepted Answer

A) Owner's capital 
B) Loan capital 
C) Reserves capital 
D) Capital reserve 
A) Owner's capital 
B) Loan capital 
C) Reserves capital 
D) Capital reserve

Question 8

Which of the following is true about the straight-line method?

Accepted Answer

A) Complex method 
B) Cost of depreciation remains constant 
C) Cost of depreciation changes every year 
D) P&L account debited with different amount every year 
A) Complex method 
B) Cost of depreciation remains constant 
C) Cost of depreciation changes every year 
D) P&L account debited with different amount every year

Question 9

The balance sheet of the debentures sinking fund after redemption of debentures is credited at the end of the accounting period to:

Accepted Answer

A) Profit and Loss Account 
B) General Reserve 
C) Debentures Account 
D) Profit and Loss Appropriation Account 
A) Profit and Loss Account 
B) General Reserve 
C) Debentures Account 
D) Profit and Loss Appropriation Account

Question 10

The value of asset can be reduced to zero under this method ____

Accepted Answer

A) Straight line method 
B) Written down value method 
C) Annuity method 
D) Depreciation fund method 
A) Straight line method 
B) Written down value method 
C) Annuity method 
D) Depreciation fund method

Question 11

Which of the following statement is false?

Accepted Answer

A) A company is a legal entity quite distinct from its members. 
B) A company can buy its own shares 
C) A shareholder is the agent of a company 
D) Same person can be agent and creditor of the company 
A) A company is a legal entity quite distinct from its members. 
B) A company can buy its own shares 
C) A shareholder is the agent of a company 
D) Same person can be agent and creditor of the company

Question 12

If the asset is sold, the provision for depreciation relating to the asset sold is transferred to:

Accepted Answer

A) Asset account 
B) Liability account 
C) P & L account 
D) Trading account 
A) Asset account 
B) Liability account 
C) P & L account 
D) Trading account

Question 13

Interest on Debenture is:

Accepted Answer

A) An appropriation of profit 
B) A charge against the profit 
C) A charge against capital reserve 
D) A part of revaluation reserve 
A) An appropriation of profit 
B) A charge against the profit 
C) A charge against capital reserve 
D) A part of revaluation reserve

Question 14

Which of the following are characteristics of the company?

Accepted Answer

A) Liability of the members is limited up to the face value of the shares held by them 
B) It is a voluntary association of persons 
C) A company is a separate body can sue and be sued its own name 
D) All of the above 
A) Liability of the members is limited up to the face value of the shares held by them 
B) It is a voluntary association of persons 
C) A company is a separate body can sue and be sued its own name 
D) All of the above

Question 15

The share of profit a shareholder will receive is called:

Accepted Answer

A) Dividend 
B) Surplus 
C) Net profit 
D) Retained profit 
A) Dividend 
B) Surplus 
C) Net profit 
D) Retained profit

Question 16

Depreciation applies to___

Accepted Answer

A) Current assets 
B) Wasting assets 
C) Intangible assets 
D) Fixed assets 
A) Current assets 
B) Wasting assets 
C) Intangible assets 
D) Fixed assets

Question 17

Depreciation of loose tools is provided by

Accepted Answer

A) Replacement method 
B) Revaluation method 
C) Diminishing value method 
D) Provisions for depreciation process 
A) Replacement method 
B) Revaluation method 
C) Diminishing value method 
D) Provisions for depreciation process

Question 18

Loss on sale of machinery will be:

Accepted Answer

A) Debited on machinery A/c 
B) Credited to machinery A/c 
C) Credited to profit and loss A/c 
D) None of them 
A) Debited on machinery A/c 
B) Credited to machinery A/c 
C) Credited to profit and loss A/c 
D) None of them

Question 19

A company can issue sweat-equity shares to:

Accepted Answer

A) The directors of the company only 
B) The employees of the company only 
C) The directors and the employees of the company 
D) The bankers and creditors of the company 
A) The directors of the company only 
B) The employees of the company only 
C) The directors and the employees of the company 
D) The bankers and creditors of the company

Question 20

Depreciable amount plus residual value of a fixed asset:

Accepted Answer

A) Depreciation expenses 
B) Accumulated depreciation 
C) Cost of the fixed asset 
D) Future economic benefits of a fixed asset 
A) Depreciation expenses 
B) Accumulated depreciation 
C) Cost of the fixed asset 
D) Future economic benefits of a fixed asset

Exam 44: Depreciation and Reserves: Understanding the Accounting Concepts

Provision for depreciation account appears on the _____

Shares having preferential right as to dividend and repayment of capital are termed as in

A share of a public company is:

A reserve created for redemption of debentures at a future date:

Provision for Depreciation is

A new company set up by existing companies with five year track record can issue share at premium provided:

Debenture is a part of:

Which of the following is true about the straight-line method?

The balance sheet of the debentures sinking fund after redemption of debentures is credited at the end of the accounting period to:

The value of asset can be reduced to zero under this method ____

Which of the following statement is false?

If the asset is sold, the provision for depreciation relating to the asset sold is transferred to:

Interest on Debenture is:

Which of the following are characteristics of the company?

The share of profit a shareholder will receive is called:

Depreciation applies to___

Depreciation of loose tools is provided by

Loss on sale of machinery will be:

A company can issue sweat-equity shares to:

Depreciable amount plus residual value of a fixed asset:

Exploring Features and Advantages of Computerized Accounting Systems

Exploring Computerized Accounting Systems and Software

Non-Profit Organizations and Financial Statements

Not-For-Profit Organizations and Financial Accounts

Goodwill and Intangible Assets

Valuation and Calculation of Goodwill

Understanding the Concepts of Lessor, Lessee, and Minimum Rent

Royalty Accounting and Partnership Firms

Accounting

Accounting and Corporate Finance

Accounting and Finance

Depreciation, Share Capital, and Forfeiture of Shares

Financial Statements and Accounting Principles

Insurance Provision and Accounting Standards

Formation and Capital Structure of Public Companies

Share Forfeiture, Debentures, and Sinking Fund

Financial Accounting and Banking

Insurance and General Insurance Companies: Understanding Terms and Concepts

Single Entry System and Company Ownership

Share Capital and Shareholders in a Company

Debentures, Bonds, and Shares

Accounting Concepts and Principles

Accounting Concepts and Practices

Financial Statements and Accounting for Nonprofit Organizations

Hire Purchase, Sale of Goods, and Bookkeeping

Accounting and Bookkeeping

Allocation of Selling Expenses Among Departments Based on Sales

Accounting Concepts and Systems

Accounting and Financial Transactions

Ac Types, Balances, and Entries

Errors, Adjustments, and Expenditures in Accounting

Capitalization, Errors, Cash Book, and Types of Accounts

Revenue Recognition and Expenditure Classification

Depreciation and Asset Provision

Accounting Adjustments and Financial Statement Treatment

Balance Sheet and Profit Loss Account

Accounting and Financial Management

Bills of Exchange, Consignment, and Partnership

Accounting Standards and Joint Ventures

Accounting and Financial Management : Part A

Accounting and Financial Management : Part B

Accounting: Interest, Bill, Partnership Agreement,insurance, Contingent Liability, and Business Resources

Fundamentals of Accounting: Objectives, Concepts, and Principles

Underwriting and Creditor Questions in Company Affairs

Amalgamation, Llp, and Single Entry System

Single Entry System and Profit Calculation

Accounting for Receipts, Payments, Income, and Expenditure in Consignment and Joint Venture Businesses

Accounting for Co-Venturers, Consignments, and Branches

Accounting Arrangements and Operations for Branches

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