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

Accounting for non-current assets — practice question

Simon started a parcel delivery business on 1 July 2021 and bought delivery vehicles, which are depreciated monthly by the straight-line method.
(a)[2]

State two causes of depreciation in the value of non-current assets.

(b)[8]

Prepare the following accounts for the year ended 30 June 2023. Use the space provided to show your workings.

(c)[2]

Calculate the profit or loss made when the delivery vehicle sold on 1 November 2022 was disposed of.

(d)[3]

Explain why it may be more suitable to depreciate motor vehicles using the reducing balance method rather than the straight-line method.

Worked solution & mark scheme

This 15-mark question has a full step-by-step worked solution and mark scheme. One marking point: Wear and deterioration

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