The 'Machine Hour Rate' method of depreciation is suitable when: MCQ with Answer and Explanation

Question
The 'Machine Hour Rate' method of depreciation is suitable when:
A. Asset is idle
B. Wear and tear is mainly due to usage
C. Asset is small
D. Asset usage varies with time
Answer: Option B
Solution (By JKSSB Mock Tests)
Machine hour rate ties depreciation to actual hours used, reflecting wear and tear.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
Which type of voucher is used to record a transaction that does not involve cash or bank at all?
A. Journal Voucher
B. Debit Voucher
C. Credit Voucher
D. Payment Voucher
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Correct Answer: Option A

Explanation:
A Journal Voucher (or Non-Cash/Transfer Voucher) is used for credit purchases, credit sales, depreciation, and adjusting entries.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In a computerized accounting system, a voucher is:
A. A printed report
B. A type of software
C. A physical paper document
D. A screen to input transaction data
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Correct Answer: Option D

Explanation:
In accounting software, voucher refers to the data entry form for recording transactions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
A firm's assets total ₹10,00,000 and its owner's equity is ₹4,00,000. The firm borrows ₹2,00,000 from a bank. After the borrowing, what is the total liabilities to outsiders?
A. ₹4,00,000
B. ₹8,00,000
C. ₹6,00,000
D. ₹10,00,000
Discuss
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Correct Answer: Option B

Explanation:
Initially, liabilities = Assets - Equity = 10,00,000 - 4,00,000 = 6,00,000. After borrowing 2,00,000, liabilities become 8,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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