Exam 14: Non-Current Assets: Acquisition and Depreciation

Items of property, plant and equipment may be acquired for a lump-sum without identification of the cost of each asset. The total cost must be allocated to the individual assets based on:

The correct entry to record the purchase of a motor vehicle for $40 000 cash, plus 10% GST is which of the following?

On 1 January 2018 Panorama Ltd acquired equipment for $22 000, net of GST. The estimated residual value for the equipment is zero. Depreciation is calculated at 10% p.a. on the diminishing-balance basis. The depreciation expense for the year ended 31 December 2020 is:

If the straight-line method of depreciation rather than the reducing-balance method is selected, in the early years of the asset's life the depreciation charge will be comparatively:

Which of the following items are required to calculate depreciation? I. Estimated residual value II. Estimated useful life III. Cost or revalued amount IV. Method of depreciation

The Delivery Vehicles account in the ledger of Transit Co. has a balance of $55 000 which is the cost of two second-hand trucks purchased on 1 July 2017. The Accumulated Depreciation - Delivery Vehicles account has a balance on 30 June 2020, before adjusting entries, of $20 000. No additional delivery trucks have been acquired or Sold. The residual value of each truck is estimated to be $2500 and the straight-line depreciation method is used. What is the necessary adjusting entry to record annual depreciation on 30 June 2020?

All of the following are common methods used to calculate depreciation except for:

Which of the following should not to be recorded in the 'office equipment' ledger account?

Which of the following are advantages of maintaining a subsidiary ledger for depreciable assets? I. It provides information for the preparation of income tax returns. II. It provides information concerning servicing of the assets. III. It provides information for internal control over assets. IV. It provides information to support insurance claims in the event of loss from theft or accident.

Which of the following will have an effect on the amount of depreciation charged on an asset in a particular accounting period? I. The size of the asset II. Method of depreciation used III. Cost or revalued amount of asset IV. Estimated residual value of asset

The correct statement concerning subsequent costs incurred in relation to a depreciable asset after its original acquisition is:

In the financial statements prepared at the end of the accounting period the Accumulated Depreciation account appears on:

IAS 16/AASB 116 Property, Plant and Equipment specifies that the cost of acquisition for fixed assets includes:

__________________refers to the management function of planning and financing of capital investment.

The most commonly used depreciation method in Australia, as disclosed by a survey of the annual reports of listed companies, is:

According to IAS 16/AASB 116, which of the following are factors contributing to the decline in an asset's future economic benefits? I. Inflation II. Wear and tear III. Commercial obsolescence IV. Technical obsolescence

Which of the following are ways in which a residual value can be recovered from an asset on its disposal? I. Trade in II. Sell second-hand III. Gift the asset to charity IV. Sell for scrap

A machine was purchased on 2 January 2018 for $70 000, net of GST. The machine had an estimated residual value of $12 000 and an estimated useful life of 6 years. Using the sum-of-the-years'-digits method and rounding to the nearest dollar, depreciation expense for the year ended 31 December 2019 , is:

When a second-hand building is purchased which of the following should be recognised in a separate asset account instead of being debited to the building account?