Provision For Depreciation On Fixed Assets: Meaning And Calculation of Depreciation - SS1 Accounting Past Questions and Answers - page 1
What is the provision of depreciation on fixed assets?
The systematic allocation of the cost of a fixed asset over its useful life
The full recording of the cost of a fixed asset in the year of purchase
The systematic allocation of the cost of a fixed asset over the next year only
The systematic allocation of the cost of a fixed asset over the next few years only
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Which method is the most common way of calculating depreciation?
Double-declining balance method
Units of production method
Straight-line method
Sum of years digits method
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What is the salvage value of an asset?
The estimated value of the asset at the end of its useful life
The initial cost of the asset
The cost of maintaining the asset
The resale value of the asset
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What is the purpose of recording depreciation expense?
To increase the value of the fixed asset
To decrease the value of the fixed asset
To accurately reflect the cost of the asset over its useful life
To calculate the total cost of the asset
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Which of the following is not a factor used to calculate depreciation?
Cost of the asset
Salvage value
Depreciation rate
Number of employees
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Why is the provision of depreciation on fixed assets important?
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How can a company calculate the depreciation expense using the straight-line method?
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Let's say a company purchases a delivery van for ₦2,000,000 with a useful life of 8 years. The salvage value of the van is estimated to be ₦200,000. What is the depreciation expense per year using the straight-line method?
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