Depreciation of Fixed Assets

Which of the following does not contribute to the depreciation of non-current assets?

• Physical deterioration

• Design and colour

• Obsolescence

• Usage

Which of the following methods of depreciation is best suited for motor vehicle?

• Straight line method

• Reducing balance method

• Revaluation method

• Usage method

Amount spent to acquire a non-current asset is deemed to be

• Capital expenditure

• Revenue expenditure

• Either capital and revenue expenditure, depending on the life span of the fixed asset

• None of the above

A particular piece of item purchased by the business is considered a non-current asset only if

• It is bought solely to be used in the business and not for resale.

• It is to be used by the owner alone.

• It is part of the goods to be resale at a later date.

• It is to be distributed as free samples.

The extension area built on the current factory premise is known as ______________ expenditure.

• asset

• revenue

• capital

• liability

The reducing balance balance method of depreciation is

• a fixed percentage of the net book value of the asset at the beginning of the accounting period.

• a fixed percentage of the original cost of the asset.

• the value of asset at the end of period.

• a reducing percentage on the original cost of asset.

A furniture bought at $19,000 has a scrap value of $500 at the end of its useful life of 4 years. What is the amount of depreciation every year if the straight line method is used?

• $1,900

• $4,625

• $4,750

• $18,500

If the annual depreciation for an asset remains constant over its life span, which method of depreciation is used?

• Reducing Balance Method

• Revaluation Method

• Straight Line Method

• Usage Method

The concept of depreciation is only application to

• Current assets

• Current liabilities

• Non-current assets

• Non-current liabilities

Which of the following accounting theories is applied for the depreciation of non-current assets?

• Materiality theory

• Consistency theory

• Matching theory

• Objectivity theory