In the accounts of a limited company, the balance on a provision for depreciation account . . . ?
Select ONE answer:
- is shown under the heading ‘current liabilities’.
- is shown under the heading ‘capital and reserves’.
- is shown as an appropriation of profit.
- is deducted from the cost or valuation of the related fixed assets.
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
- Not correct
- Not correct
- Not correct
- Correct – Fixed assets are shown in the balance sheet at their net book value i.e. their cost or valuation less the cumulative provision for depreciation on them.
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