Chapter 6: Non-current Assets Flashcards
Source Documents
Land and buildings: Contract and Internet transfer print out
Furniture, computer and vehicles: Tax invoice, cheque counterfoil, receipt
Investments: Cheque counterfoil, receipt
Depreciation: Journal voucher
What are assets
Positions acquired as a result of past transactions
Which non-current asset does not depreciate
Land
What is the life expectancy of non-current assets
Greater than 1 year
How else can non-current assets be referred to
Property, plant and equipment
What consists of the cost price
Original cost price + Additional costs to bring asset to the required location
Is depreciation always debited or credited?
Debited because it is an expense and expenses increase on the debit side
Accumulated depreciation is always credited.
True or false
It is true and it is also known as a negative asset and assets decrease on the credit side
Name the two depreciating methods
Straight line method and reducing/ diminishing balance method
What are non-current assets (definition)
They are assets that are purchased for purposes other than trade or resale
In which financial statements are non-current assets shown
The statement of financial position And also the statement of profit or loss and other comprehendible income
What are the steps that should be followed when a sale of a non-current asset is recorded in the accounting records
- Calculate depreciation
- Transfer the cost price of the asset to the realisation account
- Transfer accumulated depreciation to the realisation account
- Records the proceeds (selling price) of the asset
- Calculate profit or loss on the asset
How is the profit or loss on the sale of an asset calculated
Cost price - accumulated depreciation = carrying value - proceeds
What are investments listed under
Non-current assets
