Practice mode / Accounting Which statement about depreciation is correct? A Option A: Depreciation cannot be provided in case of loss in a financial year B Option B: Depreciation is provided in the books only when there is profit C Option C: Depreciation is an appropriation of profit D Option D: Depreciation is a charge against profit Correct answer D. Depreciation is a charge against profit Explanation Depreciation is an expense arising from the use of assets, so it must be charged against profit every year whether the business makes a profit or a loss. Show answer Report a problem Answer checked 11 October 2026 · How we write and check questions
Question 01 / Accounting Under which method is an asset’s cost spread equally across its useful economic life? A Option A: Sum-of-the-years'-digits method B Option B: Units-of-production method C Option C: Straight-line method D Option D: Written down value method Correct answer C. Straight-line method Show answer Open question
Question 02 / Accounting Which factors are mainly used to determine an asset’s economic life? A Option A: SEBI guidelines and Asset usage B Option B: Passage of time, asset usage, and obsolescence C Option C: Tax regulations and asset usage D Option D: Tax regulations and SEBI guidelines Correct answer B. Passage of time, asset usage, and obsolescence Show answer Open question
Question 03 / Accounting What is the accounting process of gradually turning the unexpired cost of fixed assets into expenses over several periods called? A Option A: Decrease in market value of the asset B Option B: Valuation of an asset at a point of time C Option C: Physical deterioration of the asset D Option D: Depreciation Correct answer D. Depreciation Show answer Open question
Question 04 / Accounting Consider these statements about the written down value method of depreciation: (i) the rate falls each year; (ii) the amount of depreciation falls each year; (iii) both rate and amount fall each year; (iv) the asset is written down to zero over time. Which is true? A Option A: (iii) only B Option B: (ii) and (iv) only C Option C: (i) only D Option D: (ii) only Correct answer D. (ii) only Show answer Open question
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