DEPRECIATION Question Preview (ID: 6783)


Test Your Knowledge On Methods Of Depreciation. TEACHERS: click here for quick copy question ID numbers.

Which method of depreciation uses the formula = (cost - total depreciation) * %
a) STRAIGHT LINE METHOD
b) COST METHOD
c) REDUCING BALANCE METHOD
d) MARKET VALUE

Using straight line method, calcuate the depreciation per annum if the company buys a vehicle for £15,000, keeps it 5 years, and sells for £5,000.
a) £1000
b) £2000
c) £3000
d) £3500

Annual calculation of depreciation is shown in which final account
a) TRADING ACCOUNT
b) BALANCE SHEET
c) PROFIT AND LOSS ACCOUNT
d) BANK ACCOUNT

The total depreciation calculated to date is shown in which final account
a) BALANCE SHEET
b) TRADING ACCOUNT
c) BANK ACCOUNT
d) PROFIT AND LOSS ACCOUNT

The depreciation calculations are recorded in which ledger account
a) asset account
b) bank account
c) expense account
d) provision for depreciation account

Using the reducing balance method, calcuate depreciation for year 4. The annual rate is 10%. The asset cost £20,000.
a) 1800
b) 2000
c) 1458
d) 1620

The net book value of the companies vehicles is £15,000. The current market value of the vehicles is £12,500. How much is this year's depreciation?
a) £5,000
b) £2,500
c) £27,500
d) £12,500

The headings added to the balance sheet for fixed assets are:
a) COST ANNUAL DEPRECIATION BALANCE
b) COST TOTAL DEPRECIATION NET BUYING VALUE
c) COST TOTAL DEPRECIATION NET BOOK VALUE
d) CASH TOTAL DEPRECIATION NET BOOK VALUE

Which reason for depreciation is untrue?
a) wear and tear
b) fit for purpose
c) inadequate for purpose
d) obselete

Which SSAP covers depreciation?
a) 10
b) 11
c) 12
d) 13

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