Fixed Assets MCQs 2026

Capitalization in accounting refers to

1. A removing asset from use and records ✓
2. B carrying amount exceeds proceeds on sale ✓
3. C recording cost as non-current asset ✓
4. D asset at cost less accumulated depreciation ✓

Capital expenditure in accounting refers to

1. A proceeds exceed carrying amount on sale ✓
2. B asset carried at revalued amount less depreciation ✓
3. C significant parts depreciated separately ✓
4. D spending that provides future economic benefits ✓

Revenue expenditure in accounting refers to

1. A carrying amount exceeds proceeds on sale ✓
2. B spending that benefits current period only ✓
3. C asset at cost less accumulated depreciation ✓
4. D interest on qualifying asset construction added to cost ✓

Disposal of asset in accounting refers to

1. A asset carried at revalued amount less depreciation ✓
2. B significant parts depreciated separately ✓
3. C removing asset from use and records ✓
4. D recording cost as non-current asset ✓

Gain on disposal in accounting refers to

1. A asset at cost less accumulated depreciation ✓
2. B proceeds exceed carrying amount on sale ✓
3. C interest on qualifying asset construction added to cost ✓
4. D spending that provides future economic benefits ✓

Loss on disposal in accounting refers to

1. A significant parts depreciated separately ✓
2. B recording cost as non-current asset ✓
3. C carrying amount exceeds proceeds on sale ✓
4. D spending that benefits current period only ✓

Revaluation model in accounting refers to

1. A asset carried at revalued amount less depreciation ✓
2. B interest on qualifying asset construction added to cost ✓
3. C spending that provides future economic benefits ✓
4. D removing asset from use and records ✓

Cost model in accounting refers to

1. A recording cost as non-current asset ✓
2. B spending that benefits current period only ✓
3. C asset at cost less accumulated depreciation ✓
4. D proceeds exceed carrying amount on sale ✓

Component accounting in accounting refers to

1. A significant parts depreciated separately ✓
2. B spending that provides future economic benefits ✓
3. C removing asset from use and records ✓
4. D carrying amount exceeds proceeds on sale ✓

Borrowing costs capitalization in accounting refers to

1. A spending that benefits current period only ✓
2. B proceeds exceed carrying amount on sale ✓
3. C asset carried at revalued amount less depreciation ✓
4. D interest on qualifying asset construction added to cost ✓

Fixed assets scenario 38: a Pakistani hospital must correctly handle capitalization

1. A ignore the transaction until next fiscal year ✓
2. B record only one side of the entry ✓
3. C post directly to retained earnings without analysis ✓
4. D debit and credit both affected so the equation stays balanced ✓