O-LevelAccountingAccounting principles and policies7707/11 · May/June 2020 · Q151 Mark
A non-current asset was depreciated at the end of the first year of ownership using the straight-line method based on the following information. cost $20000 working life 4 years residual value $4000 It was then found that the reducing balance method at 30% per annum should have been used. What was the effect on the profit for the year of correcting this error?
Adecrease by $2000
Bincrease by $2000
Cdecrease by $6000
Dincrease by $6000
✓ Correct answer
A: decrease by $2000
Practise more questions on this topic
Oracle Prep sorts past-paper questions by topic, so you can drill Accounting principles and policies and see which topics are most likely to come up next.
Sign up free →