SSC CGL Finance – Capital & Revenue; Depreciation Accounting – Level 3 · Challenge

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SSC CGL Finance – Capital & Revenue; Depreciation Accounting – Level 3 · Challenge – 8 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.

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1.  
A machine costing ₹ 2,40,000 was bought on 1 April 2021 and sold on 31 December 2023 for ₹ 1,80,000. Depreciation is 10% p.a. SLM (year ends 31 March). Profit or loss on sale is:

Correct Answer: B [Profit ₹ 6,000]

Explanation:

33 months × 2,000 = 66,000; BV 1,74,000; 1,80,000 − 1,74,000 = +6,000.

2.  
A machine costing ₹ 1,60,000 is depreciated at 15% WDV and sold at the end of year 2 for ₹ 1,10,000. The result is:

Correct Answer: C [Loss ₹ 5,600]

Explanation:

1,60,000 × 0.7225 = 1,15,600; 1,10,000 − 1,15,600 = −5,600.

3.  
An asset costing ₹ 50,000 has a residual value of ₹ 17,150 after 3 years. The WDV rate that reduces it exactly to this value is:

Correct Answer: C [30%]

Explanation:

(1 − r)³ = 0.343 → 1 − r = 0.7.

4.  
A machine costing ₹ 2,00,000 was depreciated at 10% SLM for 4 years. In year 5 the firm changes to 15% WDV (AS 10 treatment). Depreciation for year 5 is:

Correct Answer: D [₹ 18,000]

Explanation:

Prospective: 15% × 1,20,000 = 18,000.

5.  
Provision for depreciation: opening ₹ 45,000; charge for the year ₹ 22,000; an asset whose accumulated depreciation was ₹ 18,000 was sold. Closing provision is:

Correct Answer: B [₹ 49,000]

Explanation:

45,000 + 22,000 − 18,000 = 49,000.

6.  
Two-quantity comparisonA machine costs ₹ 2,50,000.
Quantity I: book value after 2 years at 12% p.a. on cost (SLM)
Quantity II: book value after 2 years at 12% p.a. WDV

Correct Answer: B [Quantity I < Quantity II]

Explanation:

QI = 2,50,000 − 60,000 = 1,90,000; QII = 2,50,000 × 0.88 × 0.88 = 1,93,600.

7.  
Statement-basedWhich of these are capital expenditure?
I. Legal fees paid for buying land II. Wages paid to own workers for building a new shed III. Electricity bill of the factory IV. Replacing a broken window pane

Correct Answer: A [I and II only]

Explanation:

I and II create or form part of a fixed asset; III and IV are running/maintenance costs.

8.  
Reverse questionUnder the depletion method, depreciation of year 1 was ₹ 3,00,000 when 50,000 tonnes were extracted from a mine estimated to hold 4,00,000 tonnes. The cost of the mine was:

Correct Answer: B [₹ 24,00,000]

Explanation:

₹ 6 per tonne × 4,00,000 = 24,00,000.

➤ 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)
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