Depreciation is provided on: MCQ with Answer and Explanation

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Depreciation is provided on:

A. Fixed assets (tangible)

B. Current assets

C. Fictitious assets

D. Intangible assets only

Answer: Option A

Solution (By JKSSB Mock Tests)

Depreciation is charged on tangible fixed assets like machinery, buildings to reflect wear and tear.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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Which document serves as the basis for recording transactions in the books of accounts?

A. Ledger Account

B. Trial Balance

C. Source Document

D. Financial Statement

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Correct Answer: Option C

Explanation:
Source documents (like invoices, receipts) provide the objective evidence and basic data for preparing accounting vouchers.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

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While preparing a Bank Reconciliation Statement, a cheque deposited but not yet cleared is:

A. Deducted from the bank statement balance

B. Added to the cash book balance

C. Added to the bank statement balance

D. Deducted from the cash book balance

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Correct Answer: Option C

Explanation:
When starting from bank statement (pass book) balance, a deposit in transit must be added because it's not yet reflected in the bank statement.

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Question #3

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X and Y share profits 3:2. They admit Z for 1/5th share, which he gets entirely from X. The new profit sharing ratio will be:

A. 1:2:2

B. 2:2:1

C. 3:2:1

D. 2:1:2

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Correct Answer: Option B

Explanation:
X's new share = 3/5 - 1/5 = 2/5. Y = 2/5. Z = 1/5. Ratio = 2:2:1.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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