MGT101-Financial Accounting-I Final Preparation Quiz Fall 2021

 

Final-Term Preparation
Quiz FALL 2020

Question No 1:

_________ is the (Raise For Success) systematic allocation of the depreciable amount of an asset over its useful life.

• Depreciable Amount
• Accumulated Depreciation
• Depreciation Correct
• All of the above 

Question No 2:

Which of the (Raise For Success) following is NOT components of cost components:

• Purchase Price
• Import Duties
• Cost of Restoration
• Indirect Cost Correct

Reason:

Cost Components:

• Purchase Price - Trade Discount & Rebates
• Import Duties
• Non-Refundable Purchase Taxes
• Direct Cost
• Estimated Cost of Dismantling
• Removal and Site Restoration Cost

Question No 3:

Which of the (Raise For Success) following is method used for recognizing an assets property, plant and equipment:

• Cost Model
• Revaluation Model
• Both A and B Correct
• None of the above

Question No 4:

Which of the following (Raise For Success) is the method of calculating depreciation?

• Sum of Years Digit Method
• Number of Units Output Method
• Number of Service Hours Method
• All of the above Correct

Reason: 

There are five methods of depreciation that are straight line method, Final Preparation Quiz Reducing balance method, sum of years digit method, number of units output method and number of service hours method.

Question No 5:

On 1.1.2021 for company, purchases machine Rs. 80,000. Its (Raise For Success) residual value is estimated Rs. 20,000 with 3 years useful life. Calculate depreciation of 1^st year by using straight-line method.

• 2,000
• 20,000 Correct
• 26,667
• 6,667

Reason: 

Calculation of straight-line method:

Formula:

Depreciation = Depreciable Amount / Useful Life

Depreciable Amount = Cost – Residual Value

Cost of Machine = 80,000

Residual Value = 20,000

= 80,000 – 20,000 

= 60,000

Depreciation = Depreciable Amount / Useful Life

= 60,000 / 3

= 20,000

Question No 6: