Financial Accounting Revision - Non-current Assets

Financial Accounting Revision - Non-current Assets

University

15 Qs

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Financial Accounting Revision - Non-current Assets

Financial Accounting Revision - Non-current Assets

Assessment

Quiz

Other

University

Hard

Created by

Phạm Ngọc Thúy HVNH

Used 2+ times

FREE Resource

15 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

10 sec • 1 pt

Which of the following would be classified as intangible non-current assets?
Research expenditure
Accounting software produced by the company
Computer hardware
Motor vehicle

2.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Theta Co purchased a patent on 31 December 20X3 for $250,000. Theta Co expects to use the patent for ten years, after which it will be valueless. According to IAS 38 Intangible assets, what amount will be amortised in Theta Co’s statement of profit or loss and other comprehensive income for the year ended 31 December 20X4?
$250,000
$125,000
$25,000
$50,000

3.

MULTIPLE CHOICE QUESTION

10 sec • 1 pt

An aircraft requires a planned overhaul each year at a cost of $5,000. This is a condition of being allowed to fly. How should the cost of the overhaul be treated in the financial statements?
Accrued for over the year and charged to maintenance expenses
Provided for in advance and charged to maintenance expenses
Capitalised and depreciated over the period to the next overhaul
Charged to profit or loss when the expenditure takes place

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

On 1 April 20X0 ABC Co., Ltd. held non-current assets that cost $312,000 and had accumulated depreciation of $66,000 at this date. During the year ended 31 March 20X1, ABC Co., Ltd. disposed of non-current assets which had originally cost $28,000 and had a carrying amount of $11,200. ABC Co., Ltd.’s policy is to charge depreciation of 40% on the reducing balance basis, with no depreciation charged in the year of disposal. What is the depreciation charge to the statement of profit or loss for the year ended 31 March 20X1?
$93,920
$92,130
$91,930
All are incorrect

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

An entity purchased the property for $6 million on 1 July 20X3. The land element of the purchase was $1 million. The expected life of the building was 50 years and its residual value nil. On 30 June 20X5, the property was revalued to $7 million, of which the land element was $1.24 million and the buildings $5.76 million. On 30 June 20X7, the property was sold for $6.8 million. What is the gain on disposal of the property that would be reported in the statement of profit or loss for the year to 30 June 20X7?
Gain $40,000
Loss $200,000
Gain $1,000,000
Gain $1,240,000

6.

MULTIPLE CHOICE QUESTION

10 sec • 1 pt

In time of rising prices, what effect does the use of the historical cost concept have on the company’s asset value and profit?
Asset values understated and profit overstated
Asset values and profit both overstated
Asset values overstated and profit understated
Asset values and profit both understated

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Company Z vacated an office building and let it out to a third party on 30 June 20X8. The building had an original cost of $900,000 on 1 January 20X0 and was being depreciated over 50 years. It was judged to have a fair value on 30 June 20X8 of $950,000. At the year-end date of 31 December 20X8, the fair value of the building was estimated at $1.2 million. Company Z uses the fair value model for investment property. What amount will be shown in the revaluation surplus on 31 December 20X8 in respect of this building?
$201,300
$203,000
$204,000
All are incorrect

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