Accounts - Principles of Accounts Past Questions and Answers

Pending the location of error, the difference disclosed in the trial balance is normally posted to

A An adjustment account
B A control account
C A suspense account
D A profit and loss account
E A trading account

Question 1302:

Which of the following is not true of capital expenditure? i. assets acquired for the purpose of earning income ii. extension of office building iii. it is incurred and its full benefits consumed in one period of account

A I
B Ii
C I and ii
D Ii and iii
E Iii

Question 1303:

Which of the following may cause depreciation? i. wear and tear ii. obsolescence and passage of time iii. fluctuation

A I, ii and iii
B I and ii
C I and iii
D Ii and iii
E Iii

Question 1304:

A machine cost N12,000 and has a useful life of 4 years and an expected disposal value of N400. Using the straight line method, the annual depreciation is

A N3,100
B N3,000
C N2,900
D N2,300
E N2,000

Question 1305:

A machine cost N12,000 and has a useful life of 4 years and an expected disposal value of N400.Using the reducing balance method what will be the depreciation charge for year 2 at 20%? (ignoring residual value)

A N3,000
B N2,900
C N2,400
D N1,920
E N1,536