Extracts from Tom Ltd's Statement of financial positions are given below: At year- end At beginning of year £'000 Non-current assets 240 Accumulated depreciation 105 Net book value 135 Assuming there were no disposals within the year, which of the following statements is true? £'000 295 150 145 Select one: OA. During the year, the amount spent on the purchase of non-current assets was £295,000 and the depreciation charge for the year was £150,000. OB. During the year, the amount spent on the purchase of non-current assets was £55,000 and the depreciation charge for the year was £150,000. OC. During the year, the amount spent on the purchase of non-current asset purchases was £55,000 and the depreciation charge for the year was £45,000. OD. During the year, the amount spent on the purchase of non-current assets was £295,000 and the depreciation charge for the year was £45,000.
Extracts from Tom Ltd's Statement of financial positions are given below: At year- end At beginning of year £'000 Non-current assets 240 Accumulated depreciation 105 Net book value 135 Assuming there were no disposals within the year, which of the following statements is true? £'000 295 150 145 Select one: OA. During the year, the amount spent on the purchase of non-current assets was £295,000 and the depreciation charge for the year was £150,000. OB. During the year, the amount spent on the purchase of non-current assets was £55,000 and the depreciation charge for the year was £150,000. OC. During the year, the amount spent on the purchase of non-current asset purchases was £55,000 and the depreciation charge for the year was £45,000. OD. During the year, the amount spent on the purchase of non-current assets was £295,000 and the depreciation charge for the year was £45,000.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter7: Fixed Assets, Natural Resources, And Intangible Assets
Section: Chapter Questions
Problem 7.3.4MBA
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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