Day: May 16, 2020

In the accounts of a limited company, the balance on a provision for depreciation account . . . ?

Select ONE answer:

1. is shown under the heading ‘current liabilities’.
2. is shown under the heading ‘capital and reserves’.
3. is shown as an appropriation of profit.
4. 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

1. Not correct
2. Not correct
3. Not correct
4. 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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