SSC CGL Finance – Capital & Revenue; Depreciation Accounting – Level 2 · Exam Level · Paper III Sprint

← Back

SSC CGL Finance – Capital & Revenue; Depreciation Accounting – Level 2 · Exam Level · Paper III Sprint – 15 questions, subject: Finance & Economics (Tier II Paper III). Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

Get daily current affairs & exam alerts – follow us YouTube WhatsApp Channel Telegram Channel Facebook Page Instagram
Share with friends & study groups
Link to this page from your website / blog (HTML code)
1.  
A machine costs ₹ 1,50,000, residual value ₹ 15,000, useful life 9 years. Annual depreciation (SLM) is:

Correct Answer: A [₹ 15,000]

Explanation:

(1,50,000 − 15,000) ÷ 9 = 15,000.

2.  
Cost ₹ 80,000; residual ₹ 8,000; life 6 years. The SLM rate on cost is:

Correct Answer: C [15%]

Explanation:

72,000 ÷ 6 = 12,000; 12,000 ÷ 80,000 = 15%.

3.  
A machine costing ₹ 1,20,000 is depreciated at 15% WDV. Its book value at the end of 3 years is:

Correct Answer: B [₹ 73,695]

Explanation:

1,20,000 × 0.85³ = 1,20,000 × 0.614125 = 73,695 (₹ 66,000 is the SLM answer at 15% of cost).

4.  
An asset costing ₹ 2,50,000 is depreciated at 20% WDV. Depreciation for the third year is:

Correct Answer: D [₹ 32,000]

Explanation:

2,50,000 × 0.2 × 0.8² = 32,000.

5.  
Cost ₹ 1,10,000; residual ₹ 10,000; life 4 years; sum-of-years-digits method. Depreciation for year 2 is:

Correct Answer: B [₹ 30,000]

Explanation:

Sum = 10; year 2 weight 3 → 3/10 × 1,00,000 = 30,000.

6.  
A machine costing ₹ 60,000 was bought on 1 July. Depreciation is 10% p.a. SLM and the year ends on 31 March. First-year depreciation is:

Correct Answer: C [₹ 4,500]

Explanation:

9 months: 6,000 × 9/12 = 4,500.

7.  
Price of a machine ₹ 3,00,000; transport ₹ 12,000; installation ₹ 18,000; annual maintenance contract ₹ 5,000. The amount capitalised is:

Correct Answer: A [₹ 3,30,000]

Explanation:

Maintenance is a running cost – revenue.

8.  
Two-quantity comparisonAn asset costs ₹ 1,00,000 (no residual value).
Quantity I: SLM depreciation per year for a 10-year life
Quantity II: depreciation of year 2 at 10% WDV

Correct Answer: A [Quantity I > Quantity II]

Explanation:

QI = 10,000; QII = 10% × 90,000 = 9,000.

9.  
A machine costs ₹ 5,00,000, residual ₹ 50,000, expected working life 90,000 hours. It worked 12,000 hours this year. Depreciation (units of production) is:

Correct Answer: D [₹ 60,000]

Explanation:

4,50,000 ÷ 90,000 = ₹ 5 per hour × 12,000 = 60,000.

10.  
Loose tools: opening value ₹ 24,000; bought during the year ₹ 6,000; valued at the year-end at ₹ 25,500. Depreciation is:

Correct Answer: A [₹ 4,500]

Explanation:

24,000 + 6,000 − 25,500 = 4,500.

11.  
Match the followingMatch the method with the asset it suits best:
P. Straight line Q. Depletion R. Revaluation
1. Loose tools 2. Patents 3. Quarry

Correct Answer: D [P-2, Q-3, R-1]

Explanation:

Patent – fixed life; quarry – extraction; loose tools – valuation.

12.  
Assertion–Reason
A: Under the WDV method, the book value of an asset never becomes zero.
R: Each year's depreciation is a fixed percentage of a falling balance.

Correct Answer: C [Both A and R are true and R explains A]

Explanation:

BV = C(1 − r)ⁿ > 0 for r < 100%.

13.  
Spot My Mistake“A machine of ₹ 40,000 bought on 1 October; SLM 10%; year ends 31 March; first-year depreciation = ₹ 4,000.” The correct figure is:

Correct Answer: B [₹ 2,000]

Explanation:

Only 6 months: 4,000 × 6/12 = 2,000.

14.  
Reverse questionAnnual SLM depreciation is ₹ 9,600 at 12% on cost. The cost of the asset is:

Correct Answer: D [₹ 80,000]

Explanation:

Answer: ₹ 80,000. 9,600 ÷ 0.12 = 80,000.

15.  
True/false countHow many statements are true?
I. Land is depreciated under the straight line method.
II. Depreciation is a non-cash expense.
III. Under WDV the depreciation charge falls each year.
IV. Freight on a new machine is revenue expenditure.

Correct Answer: A [Two]

Explanation:

Answer: Two. II and III are true.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
Here you get the answer with a one-line explanation. 1,064 original questions with worked answers · Part A Finance & Accounts and Part B Economics & Governance notes · practice sets + 3 mock tests
Get the book – ₹149 ₹299 →
Score: 0 Answered: 0 / 0