TOPIC 9 (i) : ACCOUNTING FOR NON CURRENT ASSET

Expenditures relating to the acquisition of non current assets are treated as

• capital expenditure

• revenue expenditure

• expenses

• revenue

Below are the examples for Revenue Expenditure EXCEPT for

• Repairs of motor vehicle

• Depreciation of non-current assets

• Installation costs

• Motor vehicle insurance (2nd year onwards)

Below are the examples of Capital Expenditure EXCEPT for

• Legal fees

• Installation costs

• Costs to acquire non-current assets

• Fuel for motor vehicles

The Revenue Expenditure will reduce the net profit at

• statement of financial position

• statement of profit and loss

• accounting equations

• journal

Expenditures for the Extensions or additions to buildings of non-current assets are treated as

• revenue expenditure

• capital expenditure

• revenue

• expenses

When recorded the depreciation expenses, ____ account is debited and ____ account is credited.

• Depreciation expenses; Asset

• Depreciation expenses; Accumulated depreciation

• Accumulated Depreciation; Depreciation expenses

• Asset ; Accumulated depreciation

• Accumulated Depreciation; Asset

The following are the examples of tangible non currents assets except

• Factory machines

• Trolleys in supermarkets

• Office equipments

• Customer goodwill

Intangible non-current assets

• cannot be substantially touched but are significant to the company

• can be converted to cash within one year

• are to be used in a daily operation and to pay ongoing expenses

• include accounts receivable, inventory, prepaid expenses and cash

What is the journal entry to record purchase of machine by credit from Star Company?

• debit Star Company; Credit Machine

• debit Machine; credit Bank

• debit Machine; credit Star Company

• debit Bank; credit Machine

Which depreciation method allocates an equal amount of depreciation to each year?

• Straight-line method

• Units-of-production method

• Reducing balance method

• Sum of years method