Question 4 (a) Explain the difference between the terms straight line and reducing balance methods of depreciation. For each method, state whether the amount of depreciation remains constant, increases or decreases each year. (8 marks) (b) The following appears in the ledger of one-year insurance account: 1 Feb Prepaid b/d 28 Feb Bank 28 Feb Accrued c/d Insurance Account RM 2,000 10,000 28 Feb Income Statement 1,000 13,000 (i) What is the annual insurance expense to be charged? (2 marks) (ii) How much was the insurance paid in advance from previous period? (2 marks) (iii) Who owes whom how much at close of business on 28 February? (4 marks) (c) Define the term 'Bad debt and give three reasons why a debt might be considered as a bad debt. (5 marks) (d) What is the difference of carriage inwards and carriage outwards? (4 marks) (Total 25 marks)