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WorksheetsDepreciation, Provisions, and, Reserves
Total questions: 20
Worksheet time: 20mins
Depreciation is decline in the book value of _________
intangible assets
liabilities
fixed assets
investments
Which of the following methods is not recognized by the Income Tax Law?
straight-line method
reducing balance method
both
none of these
Depreciation is an expense that involves cash outflow.
True
False
Under which depreciation method the amount of depreciation expenses remains the same throughout the useful life of a fixed asset?
Reducing Balance Method
Sum-of-the-year' digits method
Straight-line method
unit of production method
Capital reserves are normally created out of _________.
capital profit
normal operating activities
free or distributable profits
all of the above
Reserve created for maintaining a stable rate of dividend is termed as _________.
Debenture Redemption Reserve
Dividend Equalisation Reserve
Capital Reserve
General Reserve
If the amount of any known liability cannot be determined accurately
Reserve should be created
Reserve should be created
Provision should be created
None of the above
In the provision method of depreciation the asset, always appears at __________.
Cost price
Scrap Value
Market Price
None
The term amortisation is used to write off ___________.
Fixed Assets
Tangible Assets
Wasting Assets
Intangible Assets
Provision is a _________.
General Reserve
Secret Reserve
Specific Reserve
None of the above
dividend equilization reserve and debenture redemption reserve are examples of __________.
revenue reserve
general reserve
capital reserve
secret reserve
according to companies act 1956, secret reserves can be created by _______________.
only private companies
banking and insurance companies
only public companies
companies registered under companies act
making excessive provisions for doubtful debits builds up the secret reserve in the business.
True
False
under the fixed installment method of providing depriciation, it is calculated on ______________.
scrap value
balance amount
original cost
none of them
process of becoming out of date or obsolete is termed as _____________.
physical deterioration
depletion
obsolescence
amortization
following are the causes of depreciation except
natural resources
fixed assets
liabilities
intangible assets
which of the following is the example of capital reserve?
workmen's compensation fund
premium received on issues of shares or debentures
general reserve
none of these
dividend equalization reserve is __________.
specific reserve
secret reserve
general reserve
none of these
General reserves are shown in _________________.
re-evaluation account
profit and loss account
Balance sheet
none of these
provision is created by debitting __________.
profit and loss a/c
profit and loss appropriation a/c
trading a/c
none of these
