JAMB Accounts (Principles of Accounts) questions: Depreciation of non-current assets

17 questions with answers and explanations. Tap an option to check yourself.

1. Question 1· Depreciation of non-current assets· JAMB

   Under the straight-line method, depreciation each year is

   • Athe same amount
   • Ba fixed percentage of book value
   • Cincreasing
   • Dzero

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2. Question 2· Depreciation of non-current assets· JAMB

   A machine bought for ₦800,000 is depreciated at 10% per annum on the reducing balance. Depreciation in year 2 is

   • A₦80,000
   • B₦72,000
   • C₦64,800
   • D₦160,000

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3. Question 3· Depreciation of non-current assets· JAMB

   An asset costing ₦300,000 with accumulated depreciation of ₦180,000 is sold for ₦100,000. The loss on disposal is

   • A₦20,000
   • B₦80,000
   • C₦200,000
   • D₦120,000

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4. Question 4· Depreciation of non-current assets· JAMB

   Depreciation is caused by

   • Ainflation only
   • Bwear and tear, obsolescence and passage of time
   • Csales
   • Ddrawings

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5. Question 5· Depreciation of non-current assets· JAMB

   Accumulated depreciation is

   • Athe annual charge only
   • Bthe cost of the asset
   • Cthe selling price
   • Dthe total depreciation charged since the asset was bought

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6. Question 6· Depreciation of non-current assets· JAMB

   A machine costing ₦600,000 is depreciated at 20% per annum on the reducing balance. Its net book value at the end of year 2 is

   • A₦384,000
   • B₦360,000
   • C₦480,000
   • D₦96,000

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7. Question 7· Depreciation of non-current assets· JAMB

   The sum-of-the-years'-digits method of depreciation charges

   • Athe same amount each year
   • Bmore depreciation in early years
   • Cnothing in the first year
   • Dmore in later years

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8. Question 8· Depreciation of non-current assets· JAMB

   Under the reducing balance method, the depreciation charge

   • Arises each year
   • Bstays the same
   • Cfalls each year
   • Dis nil in the first year

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9. Question 9· Depreciation of non-current assets· JAMB

   A van costing ₦800,000 is depreciated at 25% per annum on the reducing balance. The depreciation for the second year is

   • A₦150,000
   • B₦200,000
   • C₦400,000
   • D₦600,000

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10. Question 10· Depreciation of non-current assets· JAMB

    A lorry cost ₦2,400,000, has a residual value of ₦400,000 and a useful life of 4 years. Find the annual straight-line depreciation.

    • A₦400,000
    • B₦600,000
    • C₦500,000
    • D₦700,000

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11. Question 11· Depreciation of non-current assets· JAMB

    Equipment costing ₦500,000 with a residual value of ₦50,000 is depreciated by the straight-line method over 5 years. Its net book value at the end of the second year is

    • A₦320,000
    • B₦400,000
    • C₦410,000
    • D₦300,000

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12. Question 12· Depreciation of non-current assets· JAMB

    Accumulated depreciation is shown in the statement of financial position as

    • Aa liability
    • Ba deduction from the cost of the asset
    • Ca current asset
    • Dincome

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13. Question 13· Depreciation of non-current assets· JAMB

    A machine cost ₦500,000 and is expected to last 5 years with a scrap value of ₦50,000. Annual depreciation by the straight-line method is

    • A₦100,000
    • B₦110,000
    • C₦90,000
    • D₦50,000

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14. Question 14· Depreciation of non-current assets· JAMB

    Charging depreciation reduces profit but not the cash balance because depreciation is

    • Aa liability
    • Ba cash payment
    • Ca non-cash expense
    • Da source of capital

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15. Question 15· Depreciation of non-current assets· JAMB

    A machine bought for ₦900,000 is depreciated at 10% a year on cost with no residual value. What is its carrying value after 3 years?

    • A₦270,000
    • B₦656,100
    • C₦630,000
    • D₦810,000

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16. Question 16· Depreciation of non-current assets· JAMB

    Which of these causes the depreciation of a fixed asset?

    • AWear and tear
    • BA rise in its market price
    • CGood maintenance
    • DInsurance cover

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17. Question 17· Depreciation of non-current assets· JAMB

    A van bought for ₦1,200,000 had accumulated depreciation of ₦700,000 when it was sold for ₦450,000. The result on disposal is

    • Aa profit of ₦50,000
    • Ba loss of ₦50,000
    • Ca loss of ₦250,000
    • Da profit of ₦450,000

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    Explanation and discussion