361. Cost of goods sold excludes___________?
✅ D. Postage & Stamps
Option A : Opening Stock Option B : Carriage inward Option C : Wages & Salary Option D : Postage & Stamps Correct Answer : Postage & Stamps Read more
Author: Faraz Ahmed – Page 19
362. Which of the following statements best describes the purpose of depreciation?
✅ D. Allocation of the cost of an asset to the periods in which services are received from the asset
Option A : Regular reduction of asset value to correspond to changes in market value as the asset ages Option B : A process of correlating the market value of an asset with its gradual decline in physical efficiency Option C : Allocation of cost in a manner that will ensure that Plant and Equipment items are not carried on… Read more
363. The main objective of providing depreciation is to?
✅ B. Show the true financial position in the Balance Sheet
Option A : Calculate the true profit Option B : Show the true financial position in the Balance Sheet Option C : Provide funds for replacement of fixed assets Option D : Both and Correct Answer : Show the true financial position in the Balance Sheet Read more
364. Depreciation is a process of____________?
✅ C. Allocation
Option A : Valuation Option B : Valuation and allocation Option C : Allocation Option D : Appropriation Correct Answer : Allocation Read more
365. The portion of the acquisition cost of the asset yet to be allocated is known as___________?
✅ A. Written down value
Option A : Written down value Option B : Accumulated value Option C : Salvage value Option D : Residual Value Correct Answer : Written down value Read more
366. Which of the following statements is true with regard to written down value method of depreciation?
✅ A. The rate at which the asset is written off reduces year after year
Option A : The rate at which the asset is written off reduces year after year Option B : The amount of depreciation provided reduces from year to year Option C : The rate of depreciation as well as the amount of depreciation reduce year after year Option D : The value of the asset gets reduced to zero over… Read more
367. The accounting process of gradually converting the unexpired cost of fixed assets into expenses over a series of accounting periods is_________?
✅ A. Depreciation
Option A : Depreciation Option B : Physical deterioration of the asset Option C : Decrease in market value of the asset Option D : Valuation of an asset at a point of time Correct Answer : Depreciation Read more
368. Which of the following factors are primarily considered to determine the economic life of an asset?
✅ A. Passage of time, asset usage, and obsolescence
Option A : Passage of time, asset usage, and obsolescence Option B : Tax regulations and SEBI guidelines Option C : Tax regulations and asset usage Option D : SEBI guidelines and Asset usage Correct Answer : Passage of time, asset usage, and obsolescence Read more
369. In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?
✅ A. Straight-line method
Option A : Straight-line method Option B : Written down value method Option C : Units-of-production method Option D : Sum-of-the years-digits method Correct Answer : Straight-line method Read more
370. Which of the following statements is correct about Depreciation?
✅ B. Depreciation is a charge against profit
Option A : Depreciation cannot be provided in case of loss in a financial year Option B : Depreciation is a charge against profit Option C : Depreciation is provided in the books only when there is profit Option D : Depreciation is an appropriation of profit Correct Answer : Depreciation is a charge against profit Read more