G11ACCL16 Asset Disposal General Ledger Pre Lesson Quiz

Which of the following statements are incorrect?

• All the information of an asset, including the rate and method od depreciation, is kept up to date in the asset register

• Depreciation is paid at the end of the year from the bank account of the business and recorded in the CPJ

• Depreciation of assets is an expense for the business

• The first step in recording the disposal of an asset is to calculate the accumulated depreciation up to the ate of disposal

What is the main purpose of the asset disposal account in the general ledger?

• To show that an asset has been disposed of

• It is used to reconcile with the asset register at the end of the year

• To check which assets should be disposed soon

• To calculate whther a profit or loss has been made on the sale of asset.

Simon's Pies owns a large industrial quality oven that was purchased at a cost price of R92 108. The accumulated depreciation up to 30 June 2021 is R29 105. The depreciation for the year ended 30 June 2022 has been calculated as R14 981. 

Calculate the carrying value of the oven as at 30 June 2022.

• R63 003

• R77 127

• R48 022

• R92 108

When is depreciation on a fixed asset sold calculated when it is sold at the end of the financial year?

• At the beginning of the year

• For the Full year

• From the middle of the year

The Matching Principle States that:

• Depreciation should only be recorded for the current year

• Assets should be recorded at Cost Price

• Accumulated Depreciation is an expense

• For every debit there is an equal credit

An asset has a selling price of R6000 and a cost price of R25 000. The date of sale and financial year end are the same date. Depreciation is caluculated at 10% straight line method and the accumulated depreciaiton value of the asset is is R17 500.

• R2 500

• Depreciation per year

• R20 000

• Profit/Loss made on asset

• R5 000

• Accumulated depreciation at sale

• R1 000

• Carrying Value

An asset with a selling price of R9000 and a cost price of R40 000 is sold on 1 Septmber 2022. The financial year end is 28 February 2023. The accumulated depreciation at the beginning of the financial year is R28 800 on 8% pa straight line method.

• R1600

• Accumulated depreciation at sale

• 6

• Depreciation

• R9 600

• Months of asset in use

• R600

• Profit/Loss

• R30 400

• Carrying Value at sale

The selling price of an asset is R120 000 and the Cost price is R250 000. The date of sale and financial year end land on the same date. The accumulated depreciation of the asset is R120 500 at the beginning of the year, using 10% pa dminishing balance method.

• 250 000 - 120 500

• Carrying Value (beginning of financial year)

• R3 500

• Profit/Loss made on sale

• R12 950

• Depreciation

• 129 500 - 12 950

• Carrying Value (end of financial year)

The selling price on an asset is R70 000 on 30 November 2022. The cost price of the asset is R220 000 and the financial year end if 28 Fenruary 2023. Depreication is calculated on diminishing balance method (8% pa) and the accumulated depreciation at the beginning of the year is R145 000.

• R4 470

• Profit/Loss made on sale

• R30

• Months in use

• 9

• Depreciation at point of sale

• R74 500

• Beginning of year carrying value

• R70 030

• Carrying value at sale

A business plans wants to know how much a vehicle is worth. The vehicle was purchased exactly 3 years ago. It has a Cost price of R250 000 and a depreciation value rate of 20% per annum.

• R32 000

• Carrying value at the beginning of year 3

• R90 000

• Depreication for year 1

• R128 000

• Carring Value at the end of year 3

• R50 000

• Depreciation for year 3

• R160 000

• Accumulated Depreciaton for year 2