O-LevelAccountingAccounting procedures7707/12 · Oct/Nov 2019 · Q171 Mark
Machinery, $20000, was purchased on 1 January 2017. The provision for depreciation of machinery account at 31 December 2018 showed the following entries. provision for depreciation of machinery account 2018 | $ | 2018 | $ ---|---|---|--- | | Jan 1 balance b/d | 4000 | | Dec 31 income statement | 3200 Which statement is not correct?
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AThe annual depreciation on machinery is calculated at the rate of 20%.
BThe balance of the provision for depreciation of machinery account is transferred to the machinery account.
CThe diminishing (reducing) balance method of depreciation has been used to calculate the annual depreciation on the machinery.
DThe net book value of the machinery on 1 January 2019 was $12800.
✓ Correct answer
B: The balance of the provision for depreciation of machinery account is transferred to the machinery account.
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