Accounting Multiple Choice Question – 28 February 2022

A business had a non-current asset with a net book value of £18,000 at 31 December 2021.

It had been purchased during the year ended 31 December 2020.

Depreciation is charged at a rate of 25% per annum using the reducing balance method.

A full year’s depreciation is charged in the year of purchase.

What was the original cost of the non-current asset?

Select ONE answer:

1. £22,500
2. £24,000
3. £27,000
4. £32,000

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 ==> £18k / 0.75 / 0.75 = £32k

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