Depreciation, Provisions & Reserves

Characteristic of a depreciation is -

• Decline in the value of assets

• Depreciation is a permanent nature

• Depreciation is a known case expense

• All of these

Depreciation for business is -

• Loss

• Gain

• Income

• Liability

Factors taken into consideration for providing depreciation are -

• Total cost of assets

• Estimated useful life of the asset

• Estimated scrap value of the asset

• All of the above

Depreciation in the value of asset is -

• Permanent decrease

• Temporary decrease

• Seasonal decrease

• None of these

Depreciation under fixed instalment method is calculated-

• On the purchase price of asset

• On the closing balance of asset

• On each year’s opening balance of the asset

• on the market price of asset

Depreciation arises due to -

• Fluctuations

• Fall in the value of money

• Temporary fall in the market value of asset

• Physical Wear and tear

Main objective of charging depreciation is-

• Ascertaining true profit or loss

• Ascertaining true financial position

• Ascertaining true cost of production

• All of the above

Which of the following assets does not depreciate?

• Machinery and equipment

• Patent

• Land

• Furniture

The term amortization is used to write off

• Fixed assets

• Intangible assets

• Tangible assets

• Wasting assets

What is depreciation?

• An increase in the value of an asset over time

• Resource diminishes over the long run because of utilization

• Assets that can quickly be turned into cash.

• Possession of assets over liabilities.