Accounting Multiple Choice Question – 8 March 2024

What is the reasoning behind charging depreciation in historical cost accounting?

Select ONE answer:

1. To ensure funds are available for the eventual replacement of the asset.
2. To comply with the consistency concept.
3. To ensure the asset is included in the statement of financial position at the lower of cost and net realisable value.
4. To match the cost of the non-current asset with the revenue that the asset generates.

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

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