TQ1: CHAPTER 7 - DEPRECIATION

Depreciation is the

• A- amount spent to improve a non-current asset.

• B- salvage value of non-current asset.

• C- part of the cost of non-current asset consumed during a period.

• D- wear and tear of non-current assets.

An asset costing 100 million KHR was purchased on 1 January 20X3. Depreciation was

provided for on monthly basis at the rate of 10% per annum using straight line method.

What was the accumulated depreciation at 30 June 20X8?

• A/ 70 million KHR

• B/ 55 million KHR

• C/ 45 million KHR

• D/ 30 million KHR

An asset costing 100 million KHR was purchased on 1 January 20X3. Depreciation was

provided for on monthly basis at the rate of 10% per annum using straight line method.

What was the carrying amount of the asset at 30 June 20X8?

• A/ 70 million KHR

• B/ 55 million KHR

• C/ 45 million KHR

• D/ 30 million KHR

The company’s policy is to charge depreciation at 20% per year on the straight

line basis, with proportionate depreciation in the years of purchase and disposal.

What should be the depreciation charge for the year ended 31 December 20X8?

• A/ 680,000 KHR

• B/ 640,000 KHR

• C/ 610,000 KHR

• D/ 550,000 KHR

What is the residual value of the equipment at the end of its useful life?

• A/ 35,000 KHR

• B/ 35,600 KHR

• C/ 73,500 KHR

• D/ 83,750 KHR

Depreciation charged on non-current assets is known to be

• A- The amount spent to buy non-current asset

• B- The salvage value of a non-current asset

• C- The part of the cost of non-current asset consumed during its period of use

• D- The amount of money spent in replacing non-current assets

Q Limited purchased equipment for 150 million KHR. The equipment was

transported at a cost of 15 million KHR and installed at a cost of 7,500,000 KHR.

The employees were trained in the use of the equipment at a cost of 50 million

KHR.

At what cost will the equipment be recognised in the accounts?

• A/ 150,000,000 KHR

• B/ 157,500,000 KHR

• C/ 165,000,000 KHR

• D/ 172,500,000 KHR

What opening balance should be included in the following period’s trial balance

for equipment at cost at 1 January 20X9?

• A/ 83,600,000 KHR debit

• B/ 83,600,000 KHR credit

• C/ 98,200,000 KHR debit

• D/ 98,200,000 KHR credit

For which of the following is ‘accruals’ the most relevant concept?

(1) Depreciation

(2) The recording of opening and closing inventory in the statement of profit or

loss

(3) The recording of deferred income

(4) The valuation of inventory at the lower of cost and net realisable value

• A/ All of them

• B/ 1 and 3 only

• C/ 2 and 3 only

• D/ 1, 2 and 3

The company’s policy is to charge depreciation at 20% per year on the straight

line basis, with proportionate depreciation in the years of purchase and disposal.

What should be the depreciation charge for the year ended 30 June 20X9?

• A/ 68,000,000 KHR

• B/ 64,000,000 KHR

• C/ 61,000,000 KHR

• D/ 55,000,000 KHR