POA Depreciation

What are the entries to record depreciation on a Fixed Asset?

• Debit - Depreciation

  Credit - Fixed Assets

• Debit - Fixed Assets

  Credit - Depreciation

• Debit - Provision for Depreciation

  Credit - Profit & Loss

• Debit - Depreciation Expense

  Credit - Provision for Depreciation

A piece of machinery was bought for $4,000. It is to be depreciated at a rate of 10% per annum, using the straight line method. What will be the Net Book Value of the machinery after two years?

• $3,240

• $3,200

• $3,600

• $3,800

2021

1 Jan Non-Current Assets at cost - $25,000

1 Jan Provision for Depreciation on

Non-Current Assets - $7,600

31 Dec Depreciation on Non-Current Assets - $2,300

What amount should be recorded for Depreciation in the Income Statement at the end of 2021?

• $2,300

• $7,600

• $5,300

• $9,900

A motor vehicle was bought for $20,000. It is to be depreciated at a rate of 10% on cost each year.

What is the estimated useful life of the motor vehicle?

• 2 years

• 20 years

• 10 years

• 200 years

Plant and Machinery at cost $25,000

Furniture at cost $7,000

Provision for Depreciation:

- - Plant & Machinery $7,500

- - Furniture $1,050

Depreciation is charged at a rate of 5% on cost for all Non-Current Assets (Fixed Assets).

How many years has the Furniture been depreciated?

• 6.7 years

• 6 years

• 5 years

• 3 years

Which of the following is not a depreciation method?

• Reducing Balance

• Diminishing

• % on Cost

• Straight Line

A pickup truck was bought for $30,000 on 1 Oct 2021. It is to be depreciated at a rate of 20% per annum on cost. What amount of depreciation should be charged on the pickup truck on 31 Dec 2021?

• $1,000

• $1,500

• $600

• $6,000

Which depreciation method charges a fixed amount of depreciation each year?

• Reducing Balance

• Diminishing Value

• % on Cost

• Straight Line

A Motor Vehicle was bought for $30,000. It is expected to have a useful life of 10 years, at the end of which it will have a salvaged value of $8,000. It is to be depreciated using the Straight Line Method.

What is the annual amount of depreciation to be charged on the motor vehicle?

• $2,200

• $3,800

• $3,000

• $8,000

An asset purchased for $1,000 is depreciated at the rate of 10% per annum using the reducing balance method.

What is the net book value at the beginning of the third year?

• $800

• $810

• $900

• $1,190