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- 1. Multiple Choice
How depreciation affect business?
Non-current asset decrease
Depreciation expense
Non-current asset increase
Depreciation expense
- 2. Multiple Choice
How depreciation and provision of depreciation differs?
Depreciation expense is in income statement while Provision for depreciation is statement of financial position
Depreciation expense is in statement of financial position while Provision for depreciation is income statement
- 3. Multiple Choice
How depreciation and provision of depreciation differs?
depreciation is only for current year while provision for depreciation is depreciation from the beginning until the current (accumulated/total)
provision for depreciation is only for current year while depreciation is from the beginning until the current (accumulated)
- 4. Multiple Choice
What is net book value?
Non-current asset - Depreciation
Non-current asset - Provision for depreciation
- 5. Multiple Choice
What is net book value?
the worth of the non-current asset as it has been depreciated
Approximate value of Non-current asset by the ower
- 6. Multiple Choice
What is disposal of non-current asset?
When business sell Non-current asset and receive cash/bank/Trade receivable in consequence
When business sell non-current asset and therefore owe to the buyer
- 7. Multiple Choice
How disposal of non-current asset affect statement of financial position?
Non-current asset decrease, provision for depreciation decrease
Net book value fall
Non-current asset decrease, provision for depreciation not affected
- 8. Multiple Choice
How disposal of non-current asset affect income statement?
Profit/loss on disposal
Cash receive is part of additional income
- 9. Multiple Choice
How to find profit/loss on disposal?
Cash VS Net book value
Net book value vs provision for depreciation
- 10. Multiple Choice
As non-current asset increases on debit, what details recorded on the debit side?
Bank/Cash (purchase of non-current asset with cash/cheque)
Balance b/d (balance at the beginning)
TR (purchase of non-current asset on credit)
Disposal (sell of non-current asset)
Balance c/d (balance at the end/balance figure)
- 11. Multiple Choice
As non-current asset increases on debit, what details recorded on the credit side?
Bank/Cash (purchase of non-current asset with cash/cheque)
Balance b/d (balance at the beginning)
TR (purchase of non-current asset on credit)
Disposal (sell of non-current asset)
Balance c/d (balance at the end/balance figure)
- 12. Multiple Choice
As provision for depreciation increases on credit, what details recorded on the credit side?
Income statement (depreciation of the year)
Balance b/d (accumulated depreciation from last years)
Disposal (reduction because of selling non-current asset)
Balance c/d (balancing figure)
- 13. Multiple Choice
As provision for depreciation increases on credit, what details recorded on the debit side?
Income statement (depreciation of the year)
Balance b/d (accumulated depreciation from last years)
Disposal (reduction because of selling non-current asset)
Balance c/d (balancing figure)
- 14. Multiple Choice
What to be recorded on debit side of disposal?
Non-current asset
Income statement (gain from disposal)
Cash (receive from selling non-current asset)
Provision for depreciation (reduction due to disposal)
income statement (loss of disposal)
- 15. Multiple Choice
What to be recorded on credit side of disposal?
Non-current asset
Income statement (gain from disposal)
Cash (receive from selling non-current asset)
Provision for depreciation (reduction due to disposal)
income statement (loss of disposal)
- 16. Multiple Choice
What is the formula of straight-line method?
(Non-current asset - residual cost) x depreciation rate
(Non-current asset - provision for depreciation) x depreciation rate
- 17. Multiple Choice
What is the formula of reducing balance method?
(Non-current asset - residual cost) x depreciation rate
(Non-current asset - provision for depreciation) x depreciation rate
- 18. Multiple Choice
Business bought machinery $2000 on 1 January 2015 and depreciate $500 per year. What is the depreciation, provision of depreciation and net book value on 31 December 2017?
Depreciation 500
Provision for depreciation 1500
Net book value 500
Depreciation 500
Provision for depreciation 1000
Net book value 1000
- 19. Multiple Choice
Business bought machinery $2000 on 1 January 2015 and depreciate $500 per year. On 31 December 2017 the machine was disposed for $700 cash while the net book value is $500. How the transaction affects income statement?
Profit on disposal $200
Loss on disposal $200
- 20. Multiple Choice
how to record disposal of non-current asset in journal?
Dr : Disposal
Cr : Non-current asset
Dr : Provision for depreciation
Cr : Disposal
Dr : Cash
Cr : Disposal
Dr : Income statement (loss on disposal)
Cr : Disposal
Dr : Disposal
Cr : Income statement (gain on disposal)
- 21. Multiple Choice
how to record depreciation in journal?
Dr Income statement
Cr Provision for depreciation
Dr Provision for depreciation
Cr Income statement
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