A-LevelAccountingAccounting for non-current assets9706/12 · Feb/Mar 2021 · Q41 Mark

Why does a business charge depreciation on its non-current assets?

Ato retain profits for the replacement of worn out assets

Bto show the correct value of the asset in the statement of financial position

Cto show when an asset needs replacing

Dto spread the cost of the assets over their useful lives

✓ Correct answer

D: to spread the cost of the assets over their useful lives

Practise more questions on this topic

Oracle Prep sorts past-paper questions by topic, so you can drill Accounting for non-current assets and see which topics are most likely to come up next.

About this question

Topic: Accounting for non-current assets, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Feb/Mar 2021 Paper 1 Variant 2, question 4.

Questions and mark schemes are from past examination papers and remain the copyright of the exam board. How Oracle Prep builds its content

Related Accounting questions

Accounting for non-current assetsFeb/Mar 20201m

The following information is available. freehold premises at cost 125000 provision for depreciation of freehold premi…

Accounting for non-current assetsFeb/Mar 20201m

A business has a year end of 31 December. It purchased a motor vehicle on 1 January 2017 for $15000. The motor vehicl…

Accounting for non-current assetsFeb/Mar 20211m

Which item is not included as part of the capital cost of a new machine?

Preparation of financial statementsFeb/Mar 20191m

During the year a business issued $1 ordinary shares at $1.20 each. The directors proposed a final dividend at the en…

Preparation of financial statementsFeb/Mar 20191m

A company has ordinary share capital of $250000. The ordinary shares have a nominal value of $0.25 each. A rights iss…

Preparation of financial statementsFeb/Mar 20191m

A shareholder sells some shares for less than he paid for them. What happens to the share capital of the company?

← Browse all past-paper questions