1/15
The journal entry to transfer accumulated depreciation when the related non-current asset is sold is
Dr Accumulated depreciation account
Cr Non-current asset account
Dr Non-current asset account
Cr Accumulated depreciation account
Dr Accumulated depreciation account
Cr Sale of non-current asset account
Dr Sale of non-current asset account
Cr Accumulated depreciation account
2/15
The journal entry to record the gain on sale of non-current asset is
Dr Non-current asset account
Cr Sale of non-current asset account
Dr Sale of non-current asset account
Cr Sale of non-current asset account
Dr Cash at Bank account
Cr Sale of non-current asset account
3/15
An asset which has a net book value of $3,200 and is sold for $3,500 will result in a
gain of $3,500
gain of $300
loss of $3,500
loss of $300
Dr Other receivables account
Cr Sale of non-current asset account
Dr Trade receivables account
Cr Sale of non-current asset account
Dr Sale of non-current asset account
Cr Other receivables account
Dr Cash at Bank account
Cr Sale of non-current asset account
5/15
A non-current asset cost $100,000. It has a scrap value of $1,000 and a useful life of 10 years. The net book value of the non-current asset after 4 years is
$40,000
$39,600
$36,000
$9,900
6/15
Gain of $6,000
Loss of $6,000
Gain of $250
Loss of $250
7/15
When non-current assets are sold on credit, the account used for the credit customer is
Trade receivables
Trade payables
Credit customers
8/15
The net book value for machinery is $12 280 was sold for $10 000.
This has resulted in a
loss of $2,280
gain of $10,000
loss of $10,000
gain of $2,280
9/15
Gain of $1,800
Loss of $2,000
Loss of $200
Gain of $200
10/15
ABC Trading has a financial year ending on 31 December and non-current assets are depreciated at 15% per annum on cost. The business does not depreciate its non-current assets in the year of sale. On 1 June 2020, the business bought office furniture for $6 000. On 31 October 2022, office furniture was sold for $4 700. The business made a
loss of $1,300
gain of $50
loss of $50
gain of $4,700
11/15
Which of the following is a correct statement about net book value?
It is an amount that can be earned from a non-current asset in one year.
It is an amount that can be earned from a non-current asset over its useful life.
It is the difference between the cost of a non-current asset and its
All of the above are correct statements about net book value.
12/15
The original cost of an asset
The value of the non-current asset at the end of its useful life
The value of the non-current asset at the time it was purchased by the business
The amount of the non-current asset after deducting total depreciation
to-date from the original cost of the non-current asset
13/15
Trade receivables: $20,000
It was estimated that 5% of trade receivables may be uncollectible.
$800
$1,000
$970
$770
14/15
What are the journal entries necessary for decreasing the allowance for impairment of trade receivables by $100?
15/15
The accounting theory that supports the creation of the allowance for impairment of trade receivables is the __________ theory.
Accounting entity
Materiality
