Accounting for depreciation Flashcards

1
Q

Define capital expenditure?

A
  • Acquisition of non current assets or an improvement in their earning capacity
  • Expenditure is written of in the income statement
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2
Q

Define revenue expenditure?

A
  • Incurred for the purposes of the business trade or to maintain the existing capacity of non current assets
  • The expenses are written of income statement
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3
Q

Main standard for tangible assets for sole traders is?

A
  • IAS 16- property, plant and equipment
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4
Q

What does DEAD CLIC stand for?

A

Debit entry will increase
Expenses
Assets
Drawings

Credit entry will increase
Liability
Income
Capital

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5
Q

NetBook value

A

The cost minus accumulated depreciation

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6
Q

Residual value

A

The estimated value of sale at the end of the assets useful life

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7
Q

Depreciation formaula

A

(Cost - Residual value) * Number of years useful life

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8
Q
A
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