Accounting Multiple Choice Question – 10 March 2021

A business has chosen to use the straight line method of providing for depreciation of equipment.

Why should it continue to use this method in subsequent years?

Select ONE answer:

1. Accounting principles never allow accounting methods to be changed.
2. Other methods of depreciation are unsuitable for depreciating equipment.
3. To ensure that profits are stated on a consistent basis over time.
4. To ensure that the Balance Sheet always shows the market value for equipment.

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 3

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

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