Provision for depreciation using straight-line and reducing balance methods - Jamb Accounts - Principles of Accounts Past Questions and Answers

Question 1:

• JAMB 1994

The term "accounting period" is used to refer to the

A. Time span during which taxes are paid to the inland revenue board
B. Budget period, usually one year, relied on by the accountant
C. Time span, usually one year, covered by financial statement
D. Period within which debtors are expected to settle accounts

Question 2:

• JAMB 1997

The process of allocating the cost of an intangible assets over its useful life is known as

A. Depreciation
B. Extraction
C. Depletion
D. Amortization

Question 3:

• JAMB 1998

On Ist January, 1993, lobo Company purchased equipment for N18,000. it uses straight-line depreciation with an estimates eight-year useful life and a N2,000 salvage value. On 31st December, 1996, it sells the equipment for N8000. In recording this sales, it should reflect?

A. N10,000 loss
B. N2,000 loss
C. N6,000 gain
D. N8,000 gain

Question 4:

• JAMB 1999

Depreciation on a particular piece of machinery was N2,700 during the fifth year of its service life and N4,050 during the sixth year. The logical explanation for this is that?

A. An addition was made to the asset during the sixth year
B. The estimate of salvage value on this equipment was decreased
C. A unit-of-output method of depreciation was used during the sixth year
D. The estimate remaining service life of the assets was increased at the beginning of the sixth year

Question 5:

• JAMB 2000

Yahuza Enterpises
Trial Balance (Extracts) as at Dec. 31, 1998.
Capital
Premises 90,000 21,000
Debtors 35,000
Provisions 1/1/98:
Depreciation 9,000
Bad and doubtful 1,500
If premises is to be depreciated at 10% on cost and a 5% provision is to be allowed on debtors, the total asset in the balance sheet is

A. N 125, 000
B. N114,500
C. N105,500
D. N105,250