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

Accounting for non-current assets — practice question

Motor vehicles bought for $530000$, at the beginning of the year, have been depreciated incorrectly for the entire year by the straight-line method at $10\%$ rather than $25\%$. After posting the entries, the ledger balances are: Motor vehicles at cost: $530000$ Provision for depreciation of motor vehicles: $53000$ Which entries will correct the error?

  • Adebit statement of profit or loss $79500$; credit provision for depreciation of motor vehicles $79500$
  • Bdebit statement of profit or loss $132500$; credit provision for depreciation of motor vehicles $132500$
  • Cdebit provision for depreciation of motor vehicles $79500$; credit statement of profit or loss $79500$
  • Ddebit provision for depreciation of motor vehicles $132500$; credit statement of profit or loss $132500$

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