Assignment 2 Question 1(10 marks Multiple choice questions (1 mark each) 1. The Joumal entry to record the sale or disposition of a depreciable plant asset always includes a) Recognition of a gain b) A debit to the accumulated depreciation account for the related accumulated depreciation c) Recognition of a loss d) A debit to the asset account for the book value of the assets 2. The principle requires that the assets cost be allocated to depreciation expense over the life of the asset el Consistency 1) Accrual 9) Matching h) Accounting period 3. A valid and complete method of calculating profit where full records have not been kept would ber a) Statement of corrected net profit h) Drawing up control Accounts for debitor and creditors c) Comparison of the changes in capital d) Analysis of the statement of affairs 4. When a non-current asset is sold for a profit, the amount is transferred to the Statement of Comprehensive Income by a debit in disposal of non-current seleccount a) True b) FAN 5. Depreciation is al The amount spent to buy fixed asset h) The salg value of lived AAA Page 17 of 24 C) The part of the cost of the fixed asset consumed during its period of use by the business d) The amount of money spent in replacing assets 6. Al the Statement of Financial Position date, the balance on the accumulate depreciation account is a) Transferred to depreciation Account h) Transferred to the Statement of Comprehensive Income C) Simply deducted from the asset account in the Statement of Financial Position di Sometimes shown as a credit, sometimes as a debit 7. The following reasons for having a bank current account would not include: a) Have to Runds for emergency use b b) The desire to eam maximum return on financial investments c) The need to make regular payment into and out of a bank d) Not to have too much cash held on the business premises 8. When banking money in the business account, you should always use: a) A cheque book b) A depositsip b) A a) A cash book d) A general ledge 9. Purchases of a motor vehicle entered in the purchases account is an example of an error of al Original entry b) Principle c) Compensating d) Commission 1. Which of the following is not needed to estimate depreciation under the reducing balance method? a) Cost of the non-current asset b) Salvage value of the non-current asset c) Rate of depreciation d) Al of the above Page 18 of 24