Tag: Reducing Balance

Accounting Multiple Choice Question – 1 August 2023

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

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A company has two fixed assets. Details are given in the table.

  • Asset X: date bought 1 Jan Year 1, cost £10,000, depreciation method 5 years straight-line, residual value £2,000
  • Asset Y: date bought 1 Jan Year 1, cost £20,000, depreciation method 20% reducing balance, residual value £NIL

What is the depreciation charge for the year ended 31 December, Year 2?

Select ONE answer:

  1. £4,800
  2. £5,200
  3. £5,600
  4. £6,000

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 1

  1. Correct – X = £10k – £2k / 5 = £1.6k; Y = (£20k – £4k) * 20% = £3.2 == > £4.8k
  2. Not correct
  3. Not correct
  4. Not correct

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