CBSE Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves MCQs

CBSE Class 11 Accountancy MCQs: Check here the detailed multiple choice questions of CBSE Class 11th Accountancy Chapter 7 Depreciation, Provisions and Reserves of different difficulty levels.

Accountancy Class 11 Depreciation, Provisions and Reserves MCQs: There are three main streams in higher-secondary classes, and they follow the curriculum formulated by the Central Board of Secondary Education (CBSE). Students’ ultimate aim is to succeed in the class 12 board exams, considered one of the hardest and most important in the country. 

The question paper is well-balanced and composed of various types of questions such as multiple choice, long-answer and short-answer questions. Hence, students have to be proficient in accountancy to perform well in the exams.

CBSE Class 11 is where students are introduced to Accountancy and its many complex topics. Your basics need to be clear, and the only way to do that is by practising regularly. On that note, we bring you the following Accountancy multiple-choice questions.

Depreciation, Provisions and Reserves is the seventh chapter of the class 11 accountancy syllabus. It’s one of the longest and most difficult chapters in the course. However, practice and dedication are all you need to master Accountancy. You can check out the MCQs for CBSE Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves below.

Related: 

CBSE Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves Class 11 Mind Map

CBSE Class 11 Accountancy Syllabus 2024

MCQs for CBSE Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves

Question 1: Which of the following methods of depreciation is not recognized by Income Tax Law?

(a) Straight Line Method

(b) Diminishing Balance Method

(c) Both a and b

(d) None of the Above

Question 2: Which of the following is the example of Capital Reserve?

(a) Workmen’s Compensation Fund

(b) General Reserve

(c) Premium Received on issue of shares or debentures

(d) None of these

Question 3: Asset Disposal A/c is prepared when :

(a) Asset A/c is prepared

(b) Profit & Loss A/c is prepared

(c) Provision for Depreciation A/c is prepared

(d) Depreciation A/c is prepared

Question 4: Which of the following is the cause of depreciation?

(a) By permanent fall in prices

(b) By constant use

(c) By Expiry of time

(d) All of the Above

Question 5: Dividend Equalisation Reserve is :

(a) General Reserve

(b) Specific Reserve

(c) Secret Reserve

(d) None of these

Question 6: Which method of depreciation suffers from the limitation of unequal burden on profit and loss account?

(a) Annuity method

(b) Reducing Balance Method

(c) Depletion Method

(d) Fixed Instalment Method

Question 7:  As per the Original Cost method which is the correct formula for calculating Annual depreciation?

(a) Depreciation = Scrap value – Cost of asset / Estimated life of asset

(b) Depreciation = Cost of asset Scrap value/ Estimated life of asset

(c) Depreciation = Cost of asset – Market value / Estimated life of asset

(d) Depreciation = Cost of asset – Scrap value/ Market value of asset

Question 8: According to the Companies Act, 1956, secret reserves can be created by:

(a) Only private company

(b) Banking and insurance companies

(c) Only public company

(d) Companies registered under the Companies Act

Question 9: Depreciation is charged on:

(a) Fixed tangible assets

(b) Current assets

(c) Both current and fixed assets

(d) None of the above

Question 10: If the amount of any known liability cannot be determined with substantial accuracy:

(a) A reserve should be created

(b) A Contingent liability should be created

(c) A definite liability should be created

(d) A provision should be created

Also Read: CBSE Class 11 Syllabus 2023-2024: Download Class 11th  Syllabus PDF