The cost of a machine is ₹1,00,000, scrap value ₹10,000, useful life 10 years. Annual depreciation under straight-line method: MCQ with Answer and Explanation

The cost of a machine is ₹1,00,000, scrap value ₹10,000, useful life 10 years. Annual depreciation under straight-line method:

A. ₹10,000

B. ₹1,000

C. ₹9,000

D. ₹11,000

Answer: Option C

Depreciation = (Cost - Scrap) / Life = (1,00,000 - 10,000) / 10 = ₹9,000.

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

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Question #1 Report Error

What is the rule of Double Entry for Real Accounts?

A. Debit what comes in, Credit what goes out

B. Debit the receiver, Credit the giver

C. Debit the increase, Credit the decrease

D. Debit all expenses, Credit all incomes

Correct Answer: Option A

Explanation:
Real accounts relate to tangible or intangible assets. The golden rule is 'Debit what comes in, Credit what goes out'.

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

Question #2 Report Error

'Dividend' can be paid out of:

A. Current year's profits or accumulated profits

B. Securities premium

C. Capital

D. Borrowed funds

Correct Answer: Option A

Explanation:
Dividend is paid only out of profits.

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

Question #3 Report Error

Deferred revenue expenditure is written off over:

A. One year

B. Never

C. A number of years over which benefit is expected

D. Immediately in the year of incurrence

Correct Answer: Option C

Explanation:
Deferred revenue expenditure like heavy advertisement is written off over a period of benefit, typically 3-5 years.

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