Accounting Multiple Choice Question – 22 November 2019

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

The balance on a firm‘s plant and machinery account on 1 January 1996 was £5,000.

During that year the following transactions took place on the dates shown.

1 May – Plant, which had originally cost £750, was sold.
1 September – New machinery costing £3000 was purchased.

If depreciation is calculated at the rate of 10% per annum, on a strict time basis, using the straight-line method. the depreciation charge on plant and machinery for 1996, to the nearest pound, is:

Select ONE answer:

  1. £525
  2. £550
  3. £600
  4. £625

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. Period: Calculation = Total
    1 January – 30 April: £5,000 * 10% * 4/12 = £166.66
    1 May – 31 August: (£5,000 – £750) * 10% * 4/12= £141.66
    1 September – 31 December: (£5,000 – £750 + £3,000) * 10% * 4/ 12 = £241.66
    Total for the year (to the nearest pound – £550.00
  3. Not Correct
  4. Not Correct

 

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