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12 Non Current Asset
This quiz tests knowledge and understanding of concepts related to capital expenditure, revenue expenditure, classification of expenditures in a business, accounting treatment of expenditures, non-accounting information when acquiring non-current assets, depreciation methods (straight-line method and reducing balance method), accumulated depreciation, and calculating the remaining book value of assets after depreciation.
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Which of the following expenditures will Jackie Tan record in the motor vehicle account as revenue expenditure?
A) Shipping cost from Korea to Singapore
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Add RecommendationAdd TagsView All Assigned TagsB) Import tax
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Add RecommendationAdd TagsView All Assigned TagsC) Motor vehicle insurance
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Add RecommendationAdd TagsView All Assigned TagsD) Painting of business logo on the van
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A) Purchase of air-conditioner for office use.
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Add RecommendationAdd TagsView All Assigned Tags(B) Cost paid for installation of air-conditioner.
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Add RecommendationAdd TagsView All Assigned Tags(C) Legal fees paid for acquiring a piece of land.
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Add RecommendationAdd TagsView All Assigned TagsD) Purchase of stationery for office use.
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Which of the following statements is true regarding the classification of expenditure in a business?
i) Revenue expenditure is recorded as an asset
ii) Capital expenditure may be treated as revenue expenditure if not material
iii) Revenue expenditure extends the useful life of a non-current asset
iv) The classification of expenditure depends on the size of the business
i) and ii)
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Add RecommendationAdd TagsView All Assigned Tagsii) and iii)
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Add RecommendationAdd TagsView All Assigned Tagsii) and iv)
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Add RecommendationAdd TagsView All Assigned TagsAll of the above
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Which statements describe capital expenditure?
1 It is for an item which will last more than a year.
2 It is recorded in the statement of financial performance
3 It is recorded in the statement of financial position.
1 It is for an item which will last more than a year.
2 It is recorded in the statement of financial performance
3 It is recorded in the statement of financial position.
A) 1 and 2
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Add RecommendationAdd TagsView All Assigned TagsB) 1 and 3
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Add RecommendationAdd TagsView All Assigned TagsC) 2 only
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Add RecommendationAdd TagsView All Assigned TagsD) 3 only
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Which of the following expenditures will be reported in the Statement of Financial Performance as revenue expenditure?
A) Petrol
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Add RecommendationAdd TagsView All Assigned TagsB) Road Tax
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Add RecommendationAdd TagsView All Assigned TagsC) Motor Insurance
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Add RecommendationAdd TagsView All Assigned TagsD) All of the above (Petrol, Road tax, Motor insurance)
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A non-current asset is recorded in the books at its ________ cost, which includes the amount paid for the asset and any other expenditure to prepare the asset for use.
A) Original
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Add RecommendationAdd TagsView All Assigned TagsB) Historical
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Add RecommendationAdd TagsView All Assigned TagsC) Current
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Add RecommendationAdd TagsView All Assigned TagsD) Market
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A non-current asset is reported in the Statement of Financial Position at its ________, which is calculated as its cost less its accumulated depreciation.
A) Net book value
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Add RecommendationAdd TagsView All Assigned TagsB) Fair market value
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Add RecommendationAdd TagsView All Assigned TagsC) Liquidation value
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Add RecommendationAdd TagsView All Assigned TagsD) Residual value
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________ is the allocation of the original cost of a non-current asset over its useful life. It is a/an ________ that is reported in the ________.
A) Depreciation; expense; statement of financial performance
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Add RecommendationAdd TagsView All Assigned TagsB) Depreciation; revenue; statement of financial position
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Add RecommendationAdd TagsView All Assigned TagsC) Depreciation; expense;statement of financial position
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Add RecommendationAdd TagsView All Assigned TagsD) Depreciation; revenue;statement of financial performance
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Which of the following is NOT considered as accounting information when making decisions about buying or renting non-current assets?
A) Features of non-current assets
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Add RecommendationAdd TagsView All Assigned TagsB) Cost of ownership versus renting
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Add RecommendationAdd TagsView All Assigned TagsC) Price of non-current assets
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Add RecommendationAdd TagsView All Assigned TagsD) Installation cost
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Which theory focuses on the need to charge depreciation in relation to relevant accounting theories?
A) Prudence theory
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Add RecommendationAdd TagsView All Assigned TagsB) Consistency theory
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Add RecommendationAdd TagsView All Assigned TagsC) Materiality theory
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Add RecommendationAdd TagsView All Assigned TagsD) Matching theory
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Which of the following is considered non-accounting information when acquiring non-current assets?
i) Purpose of the non-current asset
ii) Cost of maintaining the asset
iii) Warranty information
iv) Customer reviews of the asset
i) Purpose of the non-current asset
ii) Cost of maintaining the asset
iii) Warranty information
iv) Customer reviews of the asset
A) 1 and 2
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Add RecommendationAdd TagsView All Assigned TagsB) 2 and 3
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Add RecommendationAdd TagsView All Assigned TagsC) 1, 3 and 4
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Add RecommendationAdd TagsView All Assigned TagsD) 2, 3 and 4
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In calculating depreciation using the straight-line method, which of the following information is not required?
A) The cost of the non-current asset.
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Add RecommendationAdd TagsView All Assigned TagsB) The life-span of the non-current asset.
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Add RecommendationAdd TagsView All Assigned TagsC) The scrap value of the non-current asset
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Add RecommendationAdd TagsView All Assigned TagsD) The accumulated depreciation from the previous accounting periods
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Which of the following is a disadvantage of the Straight Line Method for calculating depreciation?
A) The method is complex and difficult to apply
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Add RecommendationAdd TagsView All Assigned TagsB) It allows for easy calculation of depreciation
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Add RecommendationAdd TagsView All Assigned TagsC) It is suitable for assets with varying benefits over time
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Add RecommendationAdd TagsView All Assigned TagsD) It does not consider changes in asset usage intensity over time
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A firm purchased a machine for $8,000. It is to be depreciated at a rate of 25% using the reducing balance method. What would be the remaining book value after 3 years?
A) $1,500
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Add RecommendationAdd TagsView All Assigned TagsB) $3,375
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Add RecommendationAdd TagsView All Assigned TagsC) $4,500
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Add RecommendationAdd TagsView All Assigned TagsD) $6,000
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Safir bought a machine for $10 000 and depreciated it at the rate of 30% per annum on the reducing balance basis. What was the net book value at the end of year 2?
A) $4000
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Add RecommendationAdd TagsView All Assigned TagsB) $4900
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Add RecommendationAdd TagsView All Assigned TagsC) $5100
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Add RecommendationAdd TagsView All Assigned TagsD) $6000
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Barok purchased a motor vehicle costing $23000 on 1 August 2024. She decided to depreciate the motor vehicle using the straight line (equal installment) method at 20% per annum. Depreciation on the motor vehicle of $4600 was charged to the statement of financial performance for the year ended 31 July 2025. How much was charged to the statement of financial performance for the year ended 31 July 2026 for depreciation on the motor vehicle?
A) $3680
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Add RecommendationAdd TagsView All Assigned TagsB) $4600
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Add RecommendationAdd TagsView All Assigned TagsC) $8280
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Add RecommendationAdd TagsView All Assigned TagsD) $9200
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A) transferred to Income Summary Account
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Add RecommendationAdd TagsView All Assigned TagsB) transferred to the Asset Account
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Add RecommendationAdd TagsView All Assigned TagsC) deducted from the asset in the Statement of Financial Position
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Add RecommendationAdd TagsView All Assigned TagsD) shown as a long-term liability in the Statement of Financial Position
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You got a score of %%YOURSCORE%% out of %%TOTALSCORE%%
Unfortunately, you did not perform well in the MCQ quiz on Capital Expenditure and Revenue Expenditure. Your understanding of these concepts seems to need improvement.
Don’t be discouraged by this result. Use it as an opportunity to delve deeper into the topic and strengthen your knowledge.
Suggestions for Improvement:
1. Review the explanations provided for each question to understand where you went wrong.
2. Focus on differentiating between capital and revenue expenditures.
3. Practice more MCQs on this topic to reinforce your understanding.
Don’t be discouraged by this result. Use it as an opportunity to delve deeper into the topic and strengthen your knowledge.
Suggestions for Improvement:
1. Review the explanations provided for each question to understand where you went wrong.
2. Focus on differentiating between capital and revenue expenditures.
3. Practice more MCQs on this topic to reinforce your understanding.
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You got a score of %%YOURSCORE%% out of %%TOTALSCORE%%
Congratulations! You have passed the MCQ quiz on Capital Expenditure and Revenue Expenditure. Your grasp of these concepts is good.
Well done on passing the quiz! Keep up the good work and continue to enhance your understanding of accounting principles.
Suggestions for Improvement:
1. Look into more examples and case studies related to capital and revenue expenditures.
2. Try to apply these concepts to real-life scenarios to solidify your knowledge.
3. Consider exploring more advanced topics within accounting to broaden your expertise.
Well done on passing the quiz! Keep up the good work and continue to enhance your understanding of accounting principles.
Suggestions for Improvement:
1. Look into more examples and case studies related to capital and revenue expenditures.
2. Try to apply these concepts to real-life scenarios to solidify your knowledge.
3. Consider exploring more advanced topics within accounting to broaden your expertise.
Continue
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You got a score of %%YOURSCORE%% out of %%TOTALSCORE%%
Fantastic job! You have excelled in the MCQ quiz on Capital Expenditure and Revenue Expenditure. Your understanding of these concepts is commendable.
Great work on achieving such a high score! Your dedication to learning these accounting principles has paid off.
Suggestions for Improvement:
1. Consider exploring more complex scenarios involving capital and revenue expenditures.
2. Look into related topics such as depreciation methods to further enhance your accounting knowledge.
3. Share your expertise with peers or engage in discussions to deepen your understanding of the subject.
Great work on achieving such a high score! Your dedication to learning these accounting principles has paid off.
Suggestions for Improvement:
1. Consider exploring more complex scenarios involving capital and revenue expenditures.
2. Look into related topics such as depreciation methods to further enhance your accounting knowledge.
3. Share your expertise with peers or engage in discussions to deepen your understanding of the subject.
Continue
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