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IAS 16 MCQ Test

Authored by Deepak Agarwal

Professional Development

11th Grade

Used 1+ times

IAS 16 MCQ Test
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following costs CANNOT be capitalized as part of the cost of property, plant, and equipment (PPE)?

Costs of site preparation.

Initial delivery and handling costs.

Costs of training personnel to use the asset.

Professional fees directly attributable to bringing the asset to its working condition.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

An entity revalues its building. If the carrying amount of the building increases, the increase should be credited to:

Retained earnings.

Profit or loss.

Revaluation surplus in equity.

Deferred revenue.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which depreciation method assumes that the asset provides more benefits in its early years and less in its later years?

Straight-line method.

Units of production method.

Diminishing balance method.

All of the above.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

An entity purchased a machine for $100,000. It has an estimated useful life of 5 years and a residual value of $10,000. Using the straight-line method, what is the annual depreciation expense?

$18,000

$20,000

$22,000

$24,000

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a key requirement when an entity chooses to revalue its PPE?

All PPE must be revalued annually.

Only assets with increasing fair values must be revalued.

The entire class of PPE to which the asset belongs must be revalued.

Individual assets can be revalued selectively.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Costs of day-to-day servicing of PPE are generally:

Capitalized as part of the asset's cost.

Recognized as an expense in profit or loss.

Credited to the revaluation surplus.

Deferred and amortized over the asset's useful life.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

An entity has a machine with a cost of $50,000 and accumulated depreciation of $30,000. The machine is sold for $25,000. What is the gain or loss on disposal?

$5,000 gain.

$5,000 loss.

$15,000 gain.

$15,000 loss.

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