Day: April 7, 2024

Accounting Multiple Choice Question – 7 April 2024

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Alex plc had computer equipment with a carrying amount at 1 April 2022 of £150,000.

On that date it traded in a computer which had cost £24,000 on 1 April 2020 for a new computer

which cost £34,600, handing over a cheque in full settlement for £18,000.

Alex plc depreciates computers at 40% per annum on the reducing balance.

How much depreciation will be charged in Alex plc’s income statement for the year ended 31 March 2023 in respect of computers?

Select ONE answer:

  1. £56,544
  2. £66,640
  3. £70,384
  4. £73,840

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 – Carrying amount of computer traded in = £24,000 x 60% x 60% = £8,640. Carrying amount of remaining computers is therefore 150,000+ 34,600- 8,640 = £175,960. Depreciation on these is (175,960 x 40%) = £70,384 (3)
  4. Not correct

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