Top 350+ Solved Information systems and engineering economics MCQ Questions Answer
Q. If the Computer is purchased on 11th May, 2018 then at what rate depreciation will be provided on it?
a. 60%
b. b.40%
c. 30%
d. 20%
Q. 30. If the machinery is purchased on 4th October, 2018 then at what rate depreciation will be provided on it?
a. 60%
b. b. 7.5%
c. 15%
d. 10%
Q. 31. The transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in the sale is known as :
a. lump sum sale
b. b. slump sale
c. aggregate sale
d. total sale
Q. 32. What is the rate of depreciation charged on computer software?
a. 40%
b. b. 15%
c. 60%
d. 100%
Q. 33. _______Rate of depreciation chargeable on fully temporary wooden structure for the assessment year 2019-20 is
a. 5%
b. b. 10%
c. 100%
d. 40%
Q. 47. DS acquired a building for Rs. ` 15 lakh in June, 2016 in addition to cost of land beneath the building of ` 3 lakh. It was used for personal purposes until he commenced business in June, 2018 and since then it was used for business purposes. The amount of depreciation eligible in his case for the assessment year 2019-20 would be -
a. rs.` 1,50,000
b. b. rs.` 75,000
c. rs.` 37,500
d. rs.` 1,21,500
Q. XYZ Ltd is engaged in production of textile articles. Opening WDV of the block of assets was Rs.` 15, 00,000. During the year, plant was acquired under this block on 15th June 2018 amounting to Rs.` 10, 00,000. One of the asset falling within the block was sold for Rs. ` 5, 50,000 on 14-01- 2019. Rate of depreciation of the block is 15%. Calculate the total amount of depreciation including additional depreciation available during the previous year for the block. c
a. rs.` 2,92,500
b. rs.`4,92,500
c. rs.` 3,92,500 88
d. rs.` 3,52,500
Q. Your accounting records indicate that an asset in use has a book value of $8,640. The asset cost $30,000 when it was purchased, and it has been depreciated under the 5 MACRS method. Based on the information available, determine how many years the asset has been in service.
a. 5 years
b. 6 years
c. 4 years
d. 3 years
Q. Which of the following statements is correct?
a. the reason why the u.s. congress allows business to use macrs depreciation as opposed to conventional methods is to reduce the business tax burden over the project life.
b. under the declining balance depreciation system, it is always desirable to switch to straight line depreciation.
c. when determining the cost basis for an asset’s depreciation, you must include all the costs that were incurred to keep the asset in operable condition.
d. the main reason why a typical firm may use a straight line depreciation method in reporting an income to outside investors (as opposed to any other accelerated tax depreciation methods) is to abide by the accounting principle—that is to report the true cost of doing business.
Q. Which of the following statements is correct?
a. over a project’s life, a typical business will generate a greater amount of total project cash flows (undiscounted) if a faster depreciation method is adopted.
b. no matter which depreciation method you adopt, total tax obligations over a project’s life remain unchanged.
c. depreciation recapture equals cost basis minus an asset’s book value at the time of disposal, that is, if the salvage value is less than the asset’s cost basis.
d. cash flows normally include depreciation expenses since they represent a cost of doing business.
Q. Gilbert Corporation had a gross income of $500,000 in tax year 1, $150,000 in salaries, $30,000 in wages, $20,000 in interest, and $60,000 in depreciation expenses for an asset purchased 3 years ago. Ajax Corporation has a gross income of $500,000 in tax year 1, and $150,000 in salaries, $90,000 in wages, and $20,000 in interest expenses. Apply the current tax rates and determine which of the following statements is correct.
a. both corporations will pay the same amount of income taxes in year 1.
b. both corporations will have the same amount of net cash flows in year 1.
c. ajax corporation will have a larger net cash flow than gilbert in year 1.
d. gilbert corporation will have a larger taxable income than ajax corporation in year 1.