Day: November 18, 2019

If the depreciation charge on vehicles for the current year is accounted for by debiting the profit and loss account and crediting the provision for depreciation of vehicles account, then, after the above entries have been made, the balance on the provision for depreciation of vehicles account is . . .

Select ONE answer:

1. transferred to the vehicles account.
2. listed in the trial balance.
3. deducted from the cost/valuation of vehicles in the balance sheet.
4. transferred to the profit and loss account.

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 2

1. Not Correct
2. The balance brought down on all ledger accounts is initially listed in the trial balance. The balances so listed are then used to prepare a profit and loss account and a balance sheet. The balance listed in the trial balance for any given provision for depreciation account will be deducted from the cost/valuation of the related fixed asset in the balance sheet — but this is after the trial balance has been prepared.
3. Not Correct
4. Not Correct

 

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