Qn 1: What is the definition of Depreciation?
Ans: It is the allocated cost of a non-current asset over its estimated useful life
Qn 2: A Machinery cost $25000 was purchased on 1 January 2018. It is depreciated using the straight-line method at 10% annually. Calculate the depreciation expense
Ans: $2500
Qn 3: A Computer costing $4000 had an accumulated depreciation of $1200 on 1 January 2018. It is depreciated using the reducing balance method at 5% annually. Calculate the depreciation expense
Ans: $140
Qn 4: Which financial statement is the annual Depreciation expense recorded in?
Ans: The Income Statement
Qn 5: Which financial statement is the Accumulated Depreciation recorded in?
Ans: The Statement of Financial Position (Balance Sheet)
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