Reference no: EM132806050

Questions -

Q1. On Jan.2019 Company A purchased an equipment for 100,000 SR on credit, its useful live is 5 years, salvage value is 15,000 SR, total capacity 200,000 units. According to straight-line depreciation method, what is the depreciation expense for 2019?

1. 17,000 SR

2. 20,000 SR

3. 23,000 SR

4. 15, 000 SR.

Q2. On Jan.2019 Company A purchased an equipment for 100,000 SR on credit, its useful live is 5 years, salvage value is 15,000 SR, total capacity 200,000 units. According to units of productions method, what is the depreciation expense for 2019 assuming 50,000 units have been produced?

1. 30,000 SR

2. 25,000 SR

3. 30,000 SR

4. 21,250 SR

Q3. On Jan. 2019 Company A purchased an equipment for 100,000 SR on credit, its useful live is 5 years, salvage value is 15,000 SR, total capacity 200,000 units. Using double declining balance method, what is the depreciation expense for 2019?

1. 40,000 SR

2. 17,000 SR

3. 25,000 SR

4. 30,000

Q4. Which of the following is correct regarding Land and Buildings?

1. Land is a depreciable asset.

2. Building is a non-depreciable asset.

3. Land improvements is non- depreciable asset.

4. Land is non-depreciable asset.

Q5. Which of the following is correct regarding method of depreciation?

1. Under units of productions method, annual depreciation expense is fixed.

2. Under Straight-line depreciation method, annual depreciation expense is variable.

3. Under double declining balance method, annual depreciation expense is decreasing.

4. Under double declining balance method, annual depreciation expense is increasing.

Q6. An equipment has been sold by 100,000 SR on cash, accumulated depreciation 200,000 SR, and Book value on the date of sale 80,000 SR. what is the gain or loss on the sale.

1. Gain 20,000 SR

2. Loss 20,000 SR

3. Gain 100,000 SR

4. Loss 120,000 SR

Q7. On January 1, 2013, equipment was purchased that cost 100,000 on credit, has a useful life of 8 years, and no salvage value , in 2017, the useful life was revised to 6 years. Calculate depreciation expense for the year ended December 31, 2017, using the straight-line method.

1. 12,500 SR

2. 25,000 SR

3. 30,000 SR

4. 16,667 SR

Q8. The decrease in natural resources is called

1. Depreciation expense.

2. Amortization expense.

3. Depletion expense.

4. Goodwill.

Q9. Capital expenditure

1. Currently recognized on income statement.

2. Maintain normal operating condition.

3. Does not increase productivity.

4. Extend life beyond original life.

Q10. Assets turnover is calculated as

1. Net income/ sales.

2. Net sales/ average total assets.

3. Cost of goods sold/ average total assets.

4. Average total assets/ net sales.