Accounting 9706 · AS & A Level · Accounting for non-current assets

Accounting for non-current assets — practice question

FA Limited's accounting records at 1 January 2016, along with further information on the purchase, depreciation and disposal of motor vehicles.
(a)[6]

Prepare the following ledger accounts for the year ended 31 December 2016. (Dates do not need to be shown.)

(b)[5]

Analyse the effect on the profit for the year ended 31 December 2016 if FA Limited had always used the straight-line method of depreciation at $20\%$ per annum. Show your workings.

(c)[4]

Explain two accounting concepts that are relevant to the annual depreciation charge.

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