Depreciation

Depreciation is an estimate of the loss in value of a ____________ over its expected working life.

• Current Assets

• Non-Current Asset

• Non-Current Liability

• Current Liability

The purchase of a non-current asset is a:

• Revenue Expenditure

• Capital Expenditure

From the following which is a reason for depreciation in connection with non-current assets such as wells and mines

• Physical deterioration

• Economic reasons

• Passage of time

• Depletion

Once a method has been selected for a particular non-current asset, it should be applied each year. This is an application of the _________

• Principle of consistency

• Principle of prudence

• Separate Entity

• Cost Principle

____________ of depreciation is where the same amount
of depreciation is charged each year.

• straight
  line method

• written down value

• revaluation method

The __________ is the value of a non- current asset at the end of its useful life.

• Cost

• Sale

• scrap value

• market value

On 1 July 2023 Mr. X purchased fixtures costing $25,000 and paid by cheque. He estimated that she would be able to use the fixtures for four years and then be able to sell them for $3 000.

Calculate the annual depreciation charge

• $5,500

• $4,500

• $6,250

• $22,000

Small items of equipment used in offices and laboratories, packing cases, loose tools, etc. are usually depreciated using the _________ method

• SLM

• DBM

• Revaluation

On 1st Jan, 2023, Mr. X sold a Motor Vehicle for cash $10,000. On the same date his ledger shows following balance: Motor Vechile A/c $20,000; Provision for Depreciation A/c $12,000.

Calculate the amount of profit or loss on the sale of the Motor Vehicle.

• $10,000 Loss

• $2,000 Profit

• $2,000 Loss

• $8,000 Profit

On 1st Jan, 2020, Mr. X Purchased a furniture for cash $10,000. He depreciates furniture @ 10% p.a. using reducing balance method.

Calculate the book-value of the furniture at 1st Jan., 2022.

• $8,000

• $10,000

• $8,100

• $9,000