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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?Show answer
The straight-line method charges the same amount each year:
What is the reducing-balance method?Show answer
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?Show answer
A machine costs \12,000\ residual value. State the straight-line annual depreciation. [2 marks]
What is q2?Show answer
State the double entry for charging a year's depreciation. [2 marks]
What is q3?Show answer
An asset cost \10,000\ accumulated depreciation. State its carrying amount and where it is shown. [2 marks]
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