O-LevelAccountingAccounting principles and policies7707/11 · May/June 2022 · Q151 Mark
On 1 January, Zac entered the cost of repairing equipment, $420, in the equipment account. On 31 December, depreciation of 20% per annum, using the straight-line method, was charged on the balance of the equipment account. What was the overall effect on the book value of the equipment on 31 December?
A$84 understated
B$336 overstated
C$420 overstated
D$504 understated
✓ Correct answer
B: $336 overstated
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