The term 'Amortization' refers to: MCQ with Answer and Explanation

The term 'Amortization' refers to:
A. Depreciation of tangible assets
B. Depletion of natural resources
C. Systematic write-off of intangible assets
D. Obsolescence of machinery
Answer: Option C
Solution (By JKSSB Mock Tests)
Amortization is the process of systematically writing off the cost of an intangible asset over its useful life.

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Practice More Accountancy and Book Keeping Questions

Question #1
Assertion (A): Capital is treated as an internal liability of the business. Reason (R): The business and its owner are considered distinct entities under the Business Entity Concept.
A. A is true but R is false
B. Both A and R are true but R is not the correct explanation of A
C. A is false but R is true
D. Both A and R are true and R is the correct explanation of A

Correct Answer: Option D


Explanation:
The Business Entity Concept treats the owner as a separate entity from the business, making the capital invested by the owner an internal liability.

Question #2
The 'GST' on sale of used cars by a registered person is:
A. Taxable at 18% on margin (if no ITC taken) or on value
B. Exempt
C. Nil
D. 5% on margin

Correct Answer: Option A


Explanation:
GST on sale of used vehicles by registered persons is 18% on margin (difference between purchase and selling price) if no ITC taken; otherwise on value.

Question #3
A 'Cost Centre' is:
A. A sales territory
B. A unit of product
C. A location, person, or item of equipment for which costs are accumulated
D. A method of pricing

Correct Answer: Option C


Explanation:
Cost centre is a segment of the organization where costs are collected, e.g., department, machine.