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SingaporeAccountingQuick questions

Adjustments and the Matching Principle

Quick questions on Depreciation of non-current assets explained: O-Level Principles of Accounts

5short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.

What is the straight-line method?
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The straight-line method charges the same amount each year:
What is the reducing-balance method?
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The reducing-balance method charges a fixed percentage of the carrying amount (cost less depreciation so far) each year, so the charge is larger early and smaller later:
What is q1?
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A machine costs \12,000,hasa5yearlifeanda, has a 5-year life and a \2,0002,000 residual value. State the straight-line annual depreciation. [2 marks]
What is q2?
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State the double entry for charging a year's depreciation. [2 marks]
What is q3?
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An asset cost \10,000with with \3,5003,500 accumulated depreciation. State its carrying amount and where it is shown. [2 marks]

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