Accounting on Fixed Asset

Which one are not the reason for depreciation?

• Physical Deterioration

• Owner forget to record the account

• Economic reasons

• Passage of time

What are the main methods of depreciation that are not true?

• Straight line method

• Reducing balance method

• Revaluation method

• Disposal method

Which one of the following is a revenue expenditure?

• Purchase of Property

• Cost of buying a computer for business use

• Cost of goods taken by owner for his own use

• Cost of repairing the computer used in the office

Which one of the following is a capital expenditure?

• Cost of replacing worn out tiles on the office floor

• Cost of goods distributed as samples for annadvertising campaign

• Business making a donationof $1,000 towards the buliding of rehabilitation

• Building anextension to the business existing premises

Depreciation on fixed assets is

• A capital expenditure and credited to the Fixed Assets Account

• A revenue expenditure and credited to the Fixed Asset Account

• A capital ecpenditure and debited to the Capital Account

• A revenue expenditure and debited to the Fixed Assets Account

A machine was bought for $3,000. It was expected to have a working life of five years and scrap value of $200 at the of that time.

How much would be charged as depreciation per annum using the straight line method?

• $560

• $600

• $400

• $200

A fixed asset was purchased on 1 January 2017 for $5,600. Depreciation was charged at 20% of its book value at the beginning of each year.

What would be the book value of the fixed asset at 31 December 2019, assuming that the financial year ends on 31December every year?

• $3,360

• $2,240

• $2,867

• $3,584

Which of the following is a Capital receipt?

• Cash discount received

• Interest received from time / fixed deposit placed with the bank

• Receipt from the sale of goods

• Receipt of cash from the public to purchase the limited company’s debentures issue

A fixed asset was bought for $7,600 on 1 January 2017. Depreciation of 25% per annum was charged using the reducing balance method. Assuming that the financial year ends on 31 December each year, what would be its accumulated depreciation ( written down value ) at 31 December 2019?

• $5,700

• $3,800

• $4,394

• $3,325

Which of the following is Revenue Receipt?

• Receipt of contributions from employees for their retirement benefit

• Receipt from the sale of goods

• Contribution brought in by partners as part of their share capital

• Receipt from members of the public who have applied for shares in a public limited company