O-LevelAccountingAccounting procedures7707/11 · Oct/Nov 2013 · Q161 Mark
Imran depreciates his machinery at 20% per annum using the diminishing (reducing) balance method. His financial year ends on 31 July. On 1 August 2012 his ledger showed the following. machinery at cost $20000 provision for depreciation of machinery $7200 Which journal entry records the depreciation on machinery for the year ended 31 July 2013?
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ADr income statement $1440 Cr provision for depreciation of machinery $1440
BDr income statement $2560 Cr provision for depreciation of machinery $2560
CDr provision for depreciation of machinery $1440 Cr depreciation of machinery $1440
DDr provision for depreciation of machinery $2560 Cr depreciation of machinery $2560
✓ Correct answer
B: Dr income statement $2560 Cr provision for depreciation of machinery $2560
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