DEPRECIATION MCQs:

DEPRECIATION

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Q1: An electricity company charging depreciation
on SLM on each asset separately, sells one of its
machinery in April, 2020 at Rs. 1,20,000. The WDV of
the machinery at the beginning of the year i.e. on
1/4/2020 is Rs. 1,35,000. No new machinery was
purchased during the year. The shortfall of Rs. 15,000
is treated as—

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Q2: A Ltd. has unabsorbed depreciation of
Rs. 4,50,000 for the AY 2021-2022 i.e. PY 2020-2021.
This can be carried forward

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Q3: Mr. J, a retailer acquired furniture on 10/5/2020
for Rs. 11,000 in cash and on 15/5/2020, for Rs. 15,000
and Rs. 20,000 by a bearer cheque and account payee
cheque, respectively. Depreciation allowable for AY
2021-2022 i.e. PY 2020-2021 would be

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Q4: GGC Ltd. incurred capital expenditure of
Rs. 1,50,000 on 1/4/2020 for acquisition of patents and
copyrights. Such expenditure is

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Q5: The W.D.V. of a block (Plant and Machinery,
rate of depreciation 15%) as on 1/4/2020 is
Rs. 3,20,000. A second hand machinery costing
Rs. 50,000 was acquired on 1/9/2020 but put to use on
1/11/2020. On 1/1/2021, part of this block was sold
for Rs. 2,00,000. The depreciation for AY 2021-2022
i.e. PY 2020-2021 would be

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Q6: Rate of depreciation of furniture and fitting is:

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Q7: Computation of depreciation is given:

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Q8: If a new machinery is purchased on 15/4/2019
and put to use for the purpose of the business on
2/1/2021, depreciation would be allowable at the
rate of:

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Q9: The rates of depreciation given u/s 32 and rule 5
are:

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Q10: The depreciation is allowed to:

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Q11: When WDV method of depreciation is
followed depreciation can be computed on every
single asset rather than group of asset.

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Q12: Put to use mean actual use of the asset rather
making on asset ready to use.

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Q13: If asset is purchased during the year and put to
use for less than 180 days depreciation allowed is:

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Q14: Depreciation is allowed in case of:

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Q15: In case of electricity companies charging
depreciation on SLM basis on a single asset if such
assets is sold for a price more than its value but less
than its historical cost then the assessee shall be
chargeable for:

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Q16: Electricity companies are allowed depreciation
on the basis of:

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Q17: Where the entire block of the asset is sold for a
price more than the value of the block then excess
amount shall be treated as:

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Q18: Power generating/power generating and
distributing company can claim depreciation
according to SLM method

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Q19: Additional Depreciation is at the rate of:

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Q20: Additional depreciation is allowed to an
assessee:

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Q21: Additional depreciation is allowed in case of—

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Q22: Additional depreciation shall ---------------------
-------------------------- if could not be fully charged
due to asset put to use for less than 180 days

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Q23: It is mandatory to claim depreciation

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Q24: If assessee is following cash basis of
accounting then he can’t claim depreciation since it
is a non cash item

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Q25: W.D.V. of block having 5 machines for which
depreciation rate is 15% as on 1/4/2020 is
Rs. 5,00,000. 1 new machine amounting to Rs. 1,00,000
was acquired on 1/1/2021 and put to use on
1/2/2021. During the AY 2021-2022 i.e. PY 2020-
2021, 2 old machineries are sold for `5,40,000. The
depreciation to be allowed for this block shall be:

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Q26: Unabsorbed depreciation which could not be
set off in the same assessment year can be carried
forward for:

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Q27: Unabsorbed depreciation brought forward
from an earlier year of a particular business can be
set off from:

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Q28: Mr. J acquired an asset for Rs. 5,00,000 which
includes Rs. 80,000 as GST for which Mr. J has
claimed input tax credit. The actual cost of
acquisition to be included in block of asset shall be:

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Q29: A car is imported on 1/4/2020 by J ltd. for the
use by its employee. J ltd shall be allowed
depreciation on such car at:

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Q30: Where the block of the depreciable asset is
transferred after 36 months, there will be:

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Q31: Additional depreciation shall not be allowed in
which of the following case

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Q32: An assessee purchased imported second hand
machinery and contends that additional depreciation
shall be allowed on same. Is the contention of
assessee correct?

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Q33: An assessee purchased office appliances and
contents that additional depreciation shall be
allowed on same. Is the contention of assessee
correct?

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Q34: Additional depreciation is not allowed

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Q35: When shall depreciation be restricted to 50%
of depreciation allowed?

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Q36: An assessee purchased an asset on 21/9/2020
on which rate of depreciation is 40%. The asset was
put to use on 30/11/2021. How much depreciation
shall be allowed to assessee on such asset during the
period ended 31/3/2021 and 31/3/2022

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Q37: When an asset has been destroyed in fire and
assessee has received insurance compensation which
is non-monetary. The value of such compensation

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Q38: When an asset has been destroyed in fire and
assessee has received insurance compensation which
is monetary in the nature. The amount of such
compensation

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Q39: Mr. J owns 2 machineries eligible for
depreciation @ 15%. WDV of these machines as on
1/4/2020 was Rs. 25,000 and Rs. 40,000 respectively. No
other asset was acquired in this block during year.
One of these machines were sold during PY for
Rs. 75,000. Compute capital gain.

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Q40: If an asset is put to use for less than ...............
days in the previous year, the depreciation is
charged at ..............of normal rates

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Q41: Depreciation is allowed in case of

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Q42: The depreciation is allowed to:

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Q43: Where a part of block of assets is sold for a
price more than the opening W.D.V plus cost of
asset acquired during the year, if any, the assesses
shall be subject to:

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Q44: Where a part of the block of asset is sold for a
price less than the opening W.DV. plus cost of
assets, if any, acquired during the year, the balance
amount shall be treated as:

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Q45: Where the entire block of the asset is sold for a
price more than the opening W.D.V. plus cost of
assets, if any, acquired during the year, the excess,
amount shall be subject to:

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Q46: Additional depreciation is allowed to an
assesses:

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Q47: Additional depreciation is allowed in case of—

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Q48: Additional depreciation on the specified asset
which has been put to use for less than 180 days
during the current year shall

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Q49: Mr. J acquired an asset for Rs. 5,90,000 which
included Rs. 90,000 as GST for which the assesses has
claimed ITC. The actual cost of acquisition to be
included in the block of asset shall be:

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Q50: Unabsorbed depreciation which could not be
set off during same year, can be carried forward for:

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Q51: Rate of depreciation chargeable on temporary
wooden structure in the nature of building is

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Q52: Mr. J, deriving business income, owns a car
whose WDV as on 1/4/2020 was Rs. 3,00,000. This is
the only asset in the block of assets with rate of
15%. It is estimated that one-third of the total usage
of the car is for personal use. The WDV of block of
assets as on 1/4/2021 would be

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Q53: Mr. J acquired a building for Rs. 15,00,000 in
June, 2018 in addition to cost of land beneath the
building of Rs. 3,00,000. It was used for personal
purposes until he commenced business in June, 2019
and since then it was used for business purposes.
The amount of depreciation eligible for PY 2020-
2021 would be:

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Q54: J Ltd. owns machinery (rate of depreciation is
15%), the written down value of which as on
1/4/2020 is Rs. 30,00,000. Due to fire, entire assets in
the block were destroyed and the insurer gave a
similar machinery which has FMV of Rs. 22,00,000.
The eligible depreciation in respect of this
machinery is

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Q55: J Industries Ltd. acquired a factory building
for self-use on 1/11/2020. The value of land
underneath the building was Rs. 5,00,000 and value of
building was Rs. 10,00,000. The amount of eligible
depreciation is

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Q56: GGC Pvt. Ltd. engaged in manufacturing
activity, acquired new plant and machinery for
Rs. 100,00,000 for its manufacturing unit located in
backward district of Bihar. The acquisition and use
was from 1/6/2020. The assessee is eligible for
additional depreciation of

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Q57: GGC Pvt. Ltd. acquired machinery for
Rs. 5,75,000 which included GST of Rs. 75,000 eligible
for ITC. It borrowed Rs. 3,00,000 from a bank for
purchase of the said machine. Interest on the bank
loan up to the date of put to use is Rs. 25,000. Assume
the rate of Depreciation at 15%. The eligible amount
of depreciation will be

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Q58: Dr. Johar has surgical equipment whose WDV
as on 1/4/2020 was Rs. 4,10,000. He acquired some
more equipment on 1/12/2020 for Rs. 3,50,000. He
sold equipment on 1/3/2021 for Rs. 2,00,000 whose
original cost was Rs. 1,70,000. The written down value
of the block for the purpose of computing
depreciation is: