students zone

Chapter 8b - Muliple-choice questions

1. Examples of tangible fixed assets are:
   1.   ?    trade debtors and prepayments
   2.   ?    trade creditors and accruals
   3.   ?    goodwill, patents and trademarks
   4.   ?    premises, vehicles, fixtures and fittings and equipment
2. A business buys a delivery van for £36,000, which has an estimated disposal value of £8,000 after 5 years. Under the straight-line method, the annual depreciation charge is:
   1.   ?    £36,000
   2.   ?    £8,000
   3.   ?    £7,200
   4.   ?    £5,600
3. The accountant depreciates equipment by £2,000 per annum. This figure will be shown in:
   1.   ?    the invoice
   2.   ?    the bank statement
   3.   ?    the cash flow statement
   4.   ?    the profit and loss account
4. A fixed asset cost £30,000 and has an estimated disposal value of £6,000 after 4 years. Under the straight-line method, the annual provision for depreciation is:
   1.   ?    £24,000
   2.   ?    £1,500
   3.   ?    £7,500
   4.   ?    £6,000
5. A fixed asset cost £50,000 and has an estimated disposal value of £2,000 after 12 years. Under the straight-line method, the NBV after 4 years is:
   1.   ?    £16,000
   2.   ?    £42,000
   3.   ?    £34,000
   4.   ?    £33,330
6. A fixed asset cost £40,000 and is depreciated at 25% using the reducing balance method. After 2 years the NBV is:
   1.   ?    £10,000
   2.   ?    £12,500
   3.   ?    £20,000
   4.   ?    £22,500