O-LevelAccountingVerification of accounting records7707/12 · Oct/Nov 2019 · Q181 Mark
Joseph depreciates his fixtures by 20% per annum using the straight-line method. A full year's depreciation is charged in the year of purchase. During the year, repairs to fixtures of $400 were debited to the fixtures account. What was the effect of correcting this error?
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Aeffect on book value of fixtures: decrease $320; effect on profit for the year: decrease $320
Beffect on book value of fixtures: decrease $320; effect on profit for the year: increase $320
Ceffect on book value of fixtures: decrease $400; effect on profit for the year: decrease $80
Deffect on book value of fixtures: decrease $400; effect on profit for the year: increase $80
✓ Correct answer
A: effect on book value of fixtures: decrease $320; effect on profit for the year: decrease $320
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