Tag: provision for depreciation account

Questions Related to provision for depreciation account

'Provision' is a charge against profit.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. True

  2. False

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Correct Option: A
Explanation:

The term 'Provision' refers to any of t6the following amounts:

(a) The amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets; or
(b) The amount retained by way of providing for any known liability of which the amount cannot be determined with sustantial accuracy.
 Provision is a charge against the profit and is required to be created irrespective of the amount of profit.

A person is entitled to take credit of input tax as self-assessed in the return and credited to Electronic credit ledger on _____________.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. Final basis

  2. Provisional basis

  3. Partly Provisional and partly final basis

  4. None of the above

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Correct Option: B
Explanation:

what is Input Tax Credit under GST, how to calculate ITC, how to claim goods is supplied to a taxable person, the GST charged is known as Input Tax.in the return will be credited to electronic credit ledger on the provisional basis. self-assessed tax by taking credit of input available in electronic credit ledger.

State, with reasons, whether the following statement is True of False
No dividend can be declared without making provisions for reserve and depreciation.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. True

  2. False

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Correct Option: A
Explanation:

Reasons: 
(1) Dividend is the return on share capital from the distributable profits of the company. 
(2) Based on the rate of proposed dividend company is required to transfer a certain percentage to reserves as specified. 
(3) E.g. Dividend of more than 20% of paid up capital entails a minimum of 10% of net profits to be transferred to reserves. 
(4) Company may decide to transfer more than the stipulated rates voluntarily. 
(5) Also, depreciation has to be provided for / from current / previous years profits. 
These provisions help the company to become financially sound and solid. 

Bond call provision that is not practiced even after several years of issuance is classified as ______________.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. original provision

  2. deferred call

  3. deferred provision

  4. permanent provision

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Correct Option: B
Explanation:

 If the bond is called, investors are paid any accrued interest defined within the provision up to the date of recall. The investor will also receive the return of their invested principal. Also, some debt securities have a freely-callable provision. This option allows them to be called at any time.

 Whether penalties under any other provisions of the Act be imposed in respect of adjudication proceedings under section 73 or 74?

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. Yes

  2. No

  3. At proper officer's discretion

  4. None of the above

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Correct Option: B
Explanation:

Section 74 deals with cases where the provisions related to If show cause notice is issued under Section 73 and thereafter the notice makes of issue of notice, no penalty shall be payable and all proceedings in respect of Ans. It is mandatory to pay amount, collected from other person representing tax under this act, 

Whether property of a taxable person be provisionally attached to protect the revenue?

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. Yes

  2. No

  3. Cannot be done

  4. None of the above

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Correct Option: A
Explanation:

Because  Whether Section 83 of CGST provides for provisional attachment of any property including bank account of the taxable person during the course o Provisional attachment to protect revenue in certain cases attach provisionally any property belonging to the person on whom notice is .

All arrests should be made as per the provisions of _________.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. CRPC

  2. CPC

  3. FEMA

  4. IPC

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Correct Option: A

When can a refund claim be filed under provisions of section 142 ________________________.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. Duty paid under the earlier law and exported prior to appointed date

  2. Duty paid under the earlier law and exported after to appointed date

  3. Duty paid after appointed date and exported after appointed

  4. (a) and (b)

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Correct Option: D
Explanation:

A  Whether refund of duty paid would be under provisions of  (C) Section 142(3): Every claim for refund filed by any person before, on (D) Section 142(4): Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported 

B  Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary.

Provision for cash discount on debtors is a percentage of _________________.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. Debtors

  2. Net debtors

  3. Net debtors less provision for doubtful debts

  4. Net sales

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Correct Option: C
Explanation:

Discounts allowed to the existing debtors in the next year are debited to the Provision for Discount Account and not to the Profit and loss Account.In other words, the amount of the provision for discount is calculated after deducting bad debts and provision for doubtful debts from sundry debtors.

Depreciation is a Cash expenditure like other normal expenses.

book keeping and accountancy reserve and fund accounting treatment for depreciation meaning and characteristics of provisions provision for depreciation account

  1. True

  2. False

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Correct Option: B