Depreciation MCQs

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on August 14, 2021

Test your knowledge with this multiple choice question (MCQ) test on depreciation. If you can answer every question correctly, it will be excellent preparation for your exams, interviews, and professional work.

If you find any questions difficult, visit the depreciation chapter on our website to find out the necessary details about depreciation (see the Financial Accounting section).

1. The main aim of providing depreciation is:

2. Depreciation arises due to:

3. Depreciation is a process of:

4. Under the straight line method of providing depreciation, it:

5. Depreciation to machinery is debited to:

6. The total amount of depreciation of an asset cannot exceed its:

7. Depreciation is necessary to calculate:

8. Depreciation of plant is recorded in the:

9. The difference between gross investment and net investment is:

10. Currency depreciation occurs when:

11. Which of the following items provides the important function of shielding part of income from taxes?

12. The effect of inflation on the price competitiveness of a country's products may be offset by:

13. Depreciation decreases:

14. Which of the following would not lead to an increase in net cash flow?

15. In a recession:

16. Which of the following is not a cash outflow?

17. Depreciation occurs due to:

18. Under the diminishing balance method, depreciation:

19. Under the fixed installment method, depreciation is calculated on:

20. Under the diminishing balance method, depreciation is calculated on:

21. Loss on sale of plant and machinery should be written off against:

22. Assets with a limited useful life are termed:

23. The process of becoming out of date or obsolete is termed:

24. Which of these terms is used to write off in reference to tangible fixed assets?

25. The economic factor that causes depreciation is:


 

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16 thoughts on “Depreciation MCQs”

    • Thanks! Let us know what other kinds of information you’d like to see and we’ll try to add it in the future. Best of luck!

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    • Glad you found the material helpful. Let us know what other kinds of information you’d like to see and we’ll try to add it in the future. Best of luck!

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