A-LevelAccountingAccounting for non-current assets9706/12 · Oct/Nov 2019 · Q21 Mark
A business buys a non-current asset and decides to apply the straight-line method of depreciation. The accountant forgets to include an estimate of scrap value in the calculation. Which statements are correct? 1 The annual depreciation charge is too high. 2 The annual depreciation charge is too low. 3 There is likely to be a loss on disposal in the future. 4 There is likely to be a profit on disposal in the future.
A1 and 3
B1 and 4
C2 and 3
D2 and 4
✓ Correct answer
B: 1 and 4
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