Chapter Four- Depreciation of Non-Current Assets

Question 1

Accumulated Depreciation

Answer 1

The statement of financial position ledger account that records the depreciation charged to date on a non-current asset

Question 2

Carrying Amount

Answer 2

The cost of the non-current asset minus the accumulated depreciation

Question 3

Depreciable Amount

Answer 3

The cost of the asset less its residual value

Question 4

Depreciation

Answer 4

The charge to the statement of profit or loss to reflect the use of the non-current asset during the period

Question 5

Depreciation Charge

Answer 5

The amount of depreciation charged to the statement of profit or loss each period

Question 6

Diminishing Balance Method

Answer 6

Method of calculating depreciation so that a larger amount is charged in the earlier years and smaller amounts in subsequent years

Question 7

Residual Value

Answer 7

The anticipated resale value of the non-current asset at the end of its useful life to the business

Question 8

Straight-Line Method

Answer 8

A method of calculating depreciation to give the same charge each year

Question 9

Useful Life

Answer 9

The period over which the business estimates that the non-current asset will be used