FAPS Lesson 2 - Plenary

A car which cost £10,000 is being depreciated at 25% per year using the diminishing balance method. What will be the amount of the depreciation charge in the second year?

(a)  

• £1,875
• £2,500
• £4,375
• £5,000

A van which originally cost £24,000 is sold for £5,000 (both amounts net of VAT). The vehicles: accumulated depreciation account shows a balance of £19,500. This means that there is a:

(a)  

• Loss on disposal of £500
• Gain on disposal of £500
• Loss on disposal of £4,500
• Gain on disposal of £4,500

A machine which originally cost £10,000 with accumulated depreciation of £6,750 was sold for £4,000 with payment being received into the bank. The bookkeeping entries to record the proceeds are:

• DR Non-current asset account CR Disposals account

• DR Bank account

  CR Disposals account

• DR Disposals account

  CR Non-current assets

• DR Disposals account

  CR Bank account

A car which cost £10,000 is being depreciated at 25% per year using the straight line method. What will be the amount of the depreciation charge in the second year?

(a)  

• £1,875
• £2,500
• £4,375
• £5,000

You work for a shoe manufacture and you are posting the year end journal of £7,000 for depreciation for the year. You need to ​debit the ​ (a)   in the statement of ​ (b)   and credit the ​ (c)   in the statement of ​ (d)  

• depreciation charge
• profit & loss
• accumulated depreciation
• financial position

In June 20X5 you bought a vehicle for £12,000.

Depreciation is 25% per year diminishing balance basis.

In June 20X8 you sold this for £7000.

At the end of year 2 what is the accumulated depreciation?

• £6750

• £5000

• £5,250

• £7,000

In June 20X5 you bought a vehicle for £12,000.

Depreciation is 25% per year diminishing balance basis.

In June 20X8 you sold this for £7000.

What will the profit or loss on disposal be?

• £250 gain

• £1937.50 gain

• £62.50 gain

• £1937.50 loss

• £250 loss