Accounting Multiple Choice Question – 13 November 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting

A firm owns fixed assets which, in total, cost £200,000. Aggregate depreciation on these assets amounts to £80,000. If the firm depreciates its fixed assets at the rate of 20% per annum, using the straight-line method, the depreciation charge in its profit and loss account for the current accounting period is:

Select ONE answer:

  1. £16,000
  2. £20,000
  3. £24,000
  4. £40,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not Correct
  2. Not Correct
  3. Not Correct
  4. £200,000 * 20% = £40,000 – Aggregate depreciation is relevant only when calculating reducing balance depreciation, which is calculated on the basis of net book value. The depreciation charge calculated by reference to the straight-line method is always a percentage of original cost or a revalued amount, less an estimated residual value, where appropriate.

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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