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If he sent a cheque for N, UTC would send him a a credit note b debit note c journal voucher d way bill ANS: A 15 Books of original entry are used for a recording business transactions b the adjustment of accounts c reminding the book keeper to-post transactions in the ledger d informing the bookkeeper about the state of affairs. ANS: A 16 If salary account is debited instead of stationary account, the error committed is that of a commission b omission c principle d compensation ANS: A 17 Ledger accounts is mainly classified into a nominal, real and personal account b fixed and current accounts c management, financial and public sector accounting d bank and cash accounts ANS: A 18 One major advantage of a ledger is that it a is a book of original entry b is only accessible to shareholders during distribution c removes the need for preparing a balance sheet after each transaction d can be used by any type of business.
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Depreciation is a non cash flow item True False 2. Loss on sale of fixed asset is a non-operating expense True False 3. Reducing balance method of providing for depreciation is where the amount of depreciation is reduced from year to year True False 4. A loss incurred on the disposal of plant and machinery should be debited to Income Statement True False 6. The provision for depreciation of the asset sold is transferred to the debit side of the Provision for Depreciation Account True False 7. Depreciation is the cost of current asset wearing away True False 9. In the reducing balance method, depreciation rate is applied on the cost of the asset True False A The residual value of a fixed asset plus its original cost B The cost of a replacement for a fixed asset C The cost of an asset wearing away D The part of the cost of the fixed asset consumed during the period of use by the business 3 What is ignored in the computation of depreciation of a fixed asset?
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Compute the profit on sale of asset. What is the provision for depreciation sold? Show how the company's profit be affected if the staright line method is used rather than the reducing method? Depreciation is charged on the straight line method. What was the balance on the provision of depreciation after this disposal? So what is the profit or loss on disposal of this fixed asset? Depreciation is to be charged under the reducing balance method on month to month basis. On 1 January it bought a machine on hire purchase. What is the charge for depreciation for the year ended 31 December?
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