Question 1

Assets must be depreciated from the time they are acquired.

Accepted Answer

A) True 
 B)False

Question 2

Managers of some entities have resisted depreciating buildings in accordance with IASB 16.Which of the following is the grounds given by directors for failing to act in compliance with IASB 16?

Accepted Answer

A) Depreciating buildings when their values are generally increasing over time. 
B) Management is concerned that the effect on ratios such as the times interest-covered and debt/equity may lead to an entity breaching its debt covenants. 
C) Management considers that when the asset is sold the amount of gain or loss that will be reflected in the books will be incorrect. 
D) Depreciating buildings when their value is generally increasing does not make economic sense and management is concerned that the effect on ratios such as the times interest-covered and debt/equity may lead to an entity breaching its debt covenants. 
A) Depreciating buildings when their values are generally increasing over time. 
B) Management is concerned that the effect on ratios such as the times interest-covered and debt/equity may lead to an entity breaching its debt covenants. 
C) Management considers that when the asset is sold the amount of gain or loss that will be reflected in the books will be incorrect. 
D) Depreciating buildings when their value is generally increasing does not make economic sense and management is concerned that the effect on ratios such as the times interest-covered and debt/equity may lead to an entity breaching its debt covenants.

Question 3

Super Industries purchased a new vehicle on 1 May for £28 000.Upon delivery the vehicle required a new two-way radio to be installed before it could be used.This installation was completed on 30 June.Assuming a residual value of £4000 and a declining balance rate of 20 per cent,calculate the depreciation expense recorded at the end of the first two financial years since purchase.(Financial Year ends on 30 June,round to the nearest pound.)

Accepted Answer

A) £5600; £4480 
B) £0; £5600 
C) £4800; £3840 
D) £933; £5413 
A) £5600; £4480 
B) £0; £5600 
C) £4800; £3840 
D) £933; £5413

Assets must be depreciated from the time they are acquired.

Managers of some entities have resisted depreciating buildings in accordance with IASB 16.Which of the following is the grounds given by directors for failing to act in compliance with IASB 16?

An Overview of the International External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Financial Accounting

An Overview of Accounting for Assets

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

An Overview of Accounting for Liabilities

Accounting for Leases

Share Capital, Reserves and Share Options Employee Bonus Schemes

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Income Taxes

The Statement of Cash Flows

Events Occurring After the Reporting Date

Related-Party Disclosures

Earnings Per Share

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues III: Accounting for Indirect Ownership Interest

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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Exam 5: Depreciation of Property, Plant and Equipment

Assets must be depreciated from the time they are acquired.

Managers of some entities have resisted depreciating buildings in accordance with IASB 16.Which of the following is the grounds given by directors for failing to act in compliance with IASB 16?

An Overview of the International External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Financial Accounting

An Overview of Accounting for Assets

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

An Overview of Accounting for Liabilities

Accounting for Leases

Share Capital, Reserves and Share Options Employee Bonus Schemes

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Income Taxes

The Statement of Cash Flows

Events Occurring After the Reporting Date

Related-Party Disclosures

Earnings Per Share

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues III: Accounting for Indirect Ownership Interest

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

Filters