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Depreciation
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Q.1
Which fixed asset is LEAST likely to lose its value over time?
land
equipment
buildings
new delivery van
Q.2
The original cost of a plant asset minus accumulated depreciation. (p. 451)
current assets
plant assets
salvage value
book value of a plant asset
Q.3
The total amount of depreciation expense that has been recorded since the purchase of a plant asset is called
book value.
accumulated depreciation.
salvage value.
net realizable value.
Q.4
A milling machine was bought for $200,and has accumulated depreciation of $65,On February 20th, the company disposed of the machine receiving nothing in return. How would you record the loss on the disposal of the milling machine?
$65,000
$70,000
$135,000
No loss on the disposal
Q.5
Because of land’s permanent nature, it is not subject to depreciation.
True
False
Q.6
Calculating the estimated annual depreciation expense based on the amount of production expected from a plant asset.
units-of-production method
declining-balance-depreciation
straight-line-depreciation
salvage value
Q.7
Recording an equal amount of depreciation expense for a plant asset in each year of its useful life.
units-of-production method
straight-line-depreciation
salvage value
real property
Q.8
The amount that will be received for an asset at the time of its disposal.
straight-line-depreciation
units-of-production method
assessed value
salvage value
Q.9
Land and anything attached to it; also called real estate.
assessed value
real property
personal property
units-of-production method
Q.10
Cash and other assets expected to be exchanged for cash or consumed within a year.
loss on plant asset
current asset
gain on plant asset
modified half-year convention
Q.11
A type of accelerated depreciation that multiplies the book value of an asset by a constant depreciation rate to determine annual depreciation.
declining-balance-depreciation
assessed value
Modified Accelerated Cost Recovery System (MACRS)
straight-line-depreciation
Q.12
The decrease in the value of a plant asset because of the removal of a natural resource.
salvage value
loss on plant asset
depletion
gain on plant asset
Q.13
Revenue that results when a plant asset is sold for more than book value.
gain on plant asset
loss on plant asset
salvage value
plant asset record
Q.14
A method that recognizes one half of a year's depreciation in the year of acquisition.
personal property
straight-line-depreciation
modified half-year convention
half-year convention
Q.15
The loss that results when a plant asset is sold for less than book value.
salvage value
loss on plant asset
units-of-production method
real property
Q.16
The tax rate used to calculate property taxes.
loss on plant asset
plant asset record
salvage value
milage rate
Q.17
A depreciation method required by the Internal Revenue Service to be used for income tax calculation purposes for most plant assets.
units-of-production method
Modified Accelerated Cost Recovery System (MACRS)
personal property
straight-line-depreciation
Q.18
A method that recognizes a full year's depreciation if the asset is acquired in the first half of the year.
modified half-year convention
straight-line-depreciation
salvage value
units-of-production method
Q.19
All property not classified as real property.
personal property
real property
salvage value
units-of-production method
Q.20
An accounting form on which a business records information about each plant asset.
salvage value
units-of-production method
plant asset record
loss on plant asset
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