Fill in the correct words

Question 1.
Depreciation is decline in the value of ………………….

Answer

Answer: Assets

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Question 2.
Installation, freight and transport expenses are a part of ……………….

Answer

Answer: Acquisition cost

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Question 3.
Provision is a ………………. against profit.

Answer

Answer: Charge

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Question 4.
Reserve created for maintaining a stable.rate of dividend is termed as ………………….

Answer

Answer: Dividend Equilisation Fund

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State whether the following statements are True or False.

Question 1.
Depreciation is a non-cash expense.

Answer

Answer: True

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Question 2.
Depreciation is also charged on current assets.

Answer

Answer: False

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Question 3.
Depreciation is decline in the market value of tangible fixed assets.

Answer

Answer: False

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Question 4.
The main cause of depreciation is wear and tear caused by its usage.

Answer

Answer: True

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Question 5.
Depreciation must be charged so as to ascertain true profit or loss of the business.

Answer

Answer: True

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Question 6.
Depletion term is used in case of intangible assets.

Answer

Answer: False

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Question 7.
Depreciation provides fund for replacement.

Answer

Answer: True

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Question 8.
When market value of an asset is higher than book value, depreciation is not charged.

Answer

Answer: False

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Question 9.
Depreciation is charged to reduce the value of asset to its market value.

Answer

Answer: False

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Question 10.
If adequate maintenance expenditure is incurred, depreciation need not be charged.

Answer

Answer: False

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