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What is the relationship between accumulated depreciation on the balance sheet and current year depreciation on the P&L?

Accumulated depreciation is the sum of all past years' depreciation, including the current year.

Current year depreciation is subtracted from accumulated depreciation.

They are unrelated.

Accumulated depreciation is a percentage of current year depreciation.

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How can the method of proportions be used to forecast depreciation?

By calculating the ratio of depreciation to gross block for historical years and applying the average to future years.

By multiplying the previous year's depreciation by the current year's gross block.

By dividing the current year's gross block by the previous year's depreciation.

By using complex statistical models to predict future depreciation trends.

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What is the formula for calculating netblock?

Netblock = Gross block + Accumulated depreciation

Netblock = Accumulated depreciation - Gross block

Netblock = Gross block / Accumulated depreciation

Netblock = Gross block - Accumulated depreciation

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Which financial statement does the current year depreciation figure appear in?

Balance Sheet

Cash Flow Statement

Statement of Changes in Equity

Profit and Loss Statement

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What is the base rule used for in forecasting accumulated depreciation?

To calculate the depreciation rate for the current year.

To determine the salvage value of assets.

To add the current year depreciation to the previous year's accumulated depreciation.

To estimate the useful life of assets.