AQA A Level Accounting Non-current assets

Depreciation is ...

• A measure of the fall in value of a current asset over a period of time

• A measure of the increase in value of a current asset over a period of time

• A measure of the fall in value of a non-current asset over a period of time

• A measure of the increase in value of a non-current asset over a period of time

Which of the following are not a non-current assets?

• Cars in a car showroom which are traded as part of the day-to-day business

• The cars driven by the company directors. These are changed every 3 years.

• Equipment

• Land & property

Straight line depreciation is calculated as follows ...

• Cost plus expected residual value, divided by expected years of life of the asset

• Cost less expected residual value, divided by expected years of life of the asset

• Cost plus expected residual value, divided by expected years of useful life of the asset

• Cost less expected residual value, divided by expected years of useful life of the asset

If the cost of the asset is £2000, residual value is £400 and the useful economic life is 4 years, what is annual depreciation using the straight line method?

• £500 per year (£2000 / 4)

• £400 per year ((£2000 - £400) / 4)

• £600 ((£2000 + £400) / 4)

• £100 (£400 / 4)

If the cost of the asset is £12000, the sale value at the end is £2000 and the useful economic life is 5 years what is the annual depreciation using the straight line method?

• £2400 per year (£12000 / 5)

• £2000 per year ((£12000 - £2000) / 5)

• £2800 ((£12000 + £2000) / 5)

• £400 (£2000 / 5)

Straight line depreciation can also be calculated using a depreciation rate (%):

• Cost X depreciation rate (%)

• Cost divided by depreciation rate (%)

Equipment costs £14000, depreciation rate is 20% per annum. The annual depreciation rate using the straight-line method is ...

• £2800 (£14000 x 0.2)

• £70000 (£14000 / 0.2)

Equipment costs £20000, depreciation rate is 10% per annum. The annual depreciation rate using the straight-line method is ...

• £2000 (£20000 x 0.1)

• £200000 (£20000 / 0.1)

The reducing balance method of depreciation is ...

• Net book value divided by depreciation rate

• Cost of the asset x depreciation rate

• Net book value x depreciation rate

• Cost of the asset divided by depreciation rate

Net book value of a non-current asset is ...

• Cost less depreciation to date

• Cost plus depreciation to date

• Cost less the depreciation charge for the financial year of the accounts

• Cost plus the depreciation charge for the financial year of the accounts