depreciaiton

Question 1

non-current assets

Answer 1

help generate sales revenue for organisation long-term

Question 2

non-current asset example

Answer 2

vehicles and machines

Question 3

straight line depreciation

Answer 3

cost-scrap/no. of years

Question 4

how is depreciation recorded on an income statement

Answer 4

as an expense for the year

Question 5

how is depreciation recorded on SOFP

Answer 5

accumulated depreciation (non- current asset)

Question 6

net book value

Answer 6

cost- accumulated depreciation

Question 7

reducing balance

Answer 7

nbv x reducing balance rate %

Question 8

sum of digits equation

Answer 8

cost-scrap/sod x life left at start of year

Question 9

sum of digits

Answer 9

anticipated years of life
e.g if there were four years 4+3+2+1

Question 10

units of surface

Answer 10

(cost-scrap) x use in years/total use of asset

Question 11

depreciation

Answer 11

amount of asset used up in generating yearly sales revenue

Question 12

which concept does depreciation relate

Answer 12

the matching concept: calculating profit in income statement. Sales matched to expenses