Practice Accounting Treatment Of Depreciation (18.6) - Depreciation Accounting

Practice: Accounting Treatment of Depreciation

Lesson 18.6Depreciation Accounting

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9 questions

Flashcard drill
2 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What account is debited when depreciation is charged directly?
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Think of the name of the expense account.
Question 2.
What does the Provision for Depreciation account represent?
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Consider the purpose of holding provisions.
3Question 3.
What is charged directly to the asset account when depreciation is recorded?
- Cost of land
- Depreciation A/c
- Profit & Loss A/c
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Think about what expense is recognized.
4Question 4.
True or False: Provision for Depreciation is used to increase asset values.
- True
- False
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What is the purpose of setting aside provisions?
Question 5.
A company bought equipment for $12,000 with a residual value of $2,000 and a useful life of 4 years. Prepare the journal entries for the first year using the straight-line method.
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Use the straight-line method to calculate annual depreciation first.
Question 6.
Explain why an organization might prefer to use a provision for depreciation rather than charging it directly.
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Consider the implications of financial health in accounting practices.

5 more questions in this section. Enroll free to practise them all.