Depreciation

JKSSB Finance Accounts Assistant · Accountancy & Book-Keeping · 27 practice questions with answers and explanations: 8 Easy, 12 Medium, 7 Hard.

Sample questions

Sample Easy question 1

Which of the following is a common method of charging depreciation?

  1. Straight Line Method
  2. FIFO Method
  3. LIFO Method
  4. Weighted Average Method
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Answer: A. The Straight Line Method charges an equal amount of depreciation each year.

Sample Medium question 2

Under the Written Down Value (WDV) method, depreciation is calculated on:

  1. The original cost of the asset every year
  2. The reducing book value of the asset each year
  3. The scrap value of the asset
  4. The market value of a similar new asset
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Answer: B. Under WDV, depreciation is charged as a fixed percentage on the asset's book value at the start of each year, which reduces year after year.

Sample Hard question 3

An asset costing Rs. 50,000 is depreciated at 10% per annum under the Written Down Value method. Find its book value after 2 years.

  1. 40,000
  2. 40,500
  3. 41,000
  4. 42,500
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Answer: B. Year 1: 50,000 × 0.9 = 45,000. Year 2: 45,000 × 0.9 = 40,500.

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