Day: November 16, 2019

If there is a separate provision for depreciation account in the nominal (general) ledger for each category of fixed asset, the double-entry to record the depreciation charge on machinery for the current year is:

Select ONE answer:

Account to Debit        Account to Credit

1. Profit and loss                Provision for depreciation of machinery
2. Machinery                      Profit and loss
3. Profit and loss                Machinery
4. None of the above.

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 1

1. The result has to be to reduce net profit (requiring a debit entry in the profit and loss account) and to reduce the book value of machinery (requiring a credit entry in the provision for depreciation of machinery account).
2. Not Correct
3. Not Correct
4. Not Correct

 

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