Accounting Questions on Depreciation for WASSCE Business Students

The Accounting Questions on Depreciation for WASSCE Business Students is provided to aid students in their revision of the basic yet difficult to solve questions.

Accounting students preparing for their examination should consider solving these key accounting questions as part of their revision exercise. Answers must be well explained, and excellent examples used to support them where possible.  Students of accounting who solve these questions must bring clarity to the table. Do your best to brainstorm, and plan your answers before writing them.

Theory Questions On Depreciating in Accounting (Set 1)

1. Explain depreciation and identify five key details that must be considered when depreciating an asset.
2. What is a fixed asset register? Explain the two main purposes of keeping and managing a fixed asset register.
3. Explain clearly any four causes of the depreciation of an asset.
4. With the aid of examples, explain any four methods of depreciation.
5. Based on your explanations and understanding of depreciation solve the questions below.

[a] Mr. Koolchop a businessman acquired a Motor Van at the cost of $30,000.

The estimated life span of the Motor Van is 8 years.

The residual value of the Motor Van is estimated to be $1050

Calculate the depreciation of the Motor Van using the Straight line method. Ensure that the depreciation is also expressed as a percentage.

[b]  Mr. Koolchop acquired a building valued at  $300,000. The asset is expected to have a life span of 20 years. Calculate the depreciation to be charged for this asset for the first 5 years using the Reducing Balance Method.

[c] Mr. Koolchop has several assets for his business. As a new accounting officer, the following details were extracted for you.

1. 1st June 2021 – Bought motor van costing $25,000
2. 24th June 2021 – A plant and machinery worth $70,000 was bought.
3. July 8th, 2021 -Bought a Motor Van costing $80,000
4. 28th August 2021 – Bought and machinery worth $350,000

To justify your understanding of depreciation as an accounting officer, you are to prepare the following accounts.

a. The Asset Account for Mr. Koolchop

b. The provision for depreciation

c. The Profit and loss extract

d. The balance sheet extract

Mr. Koolchop has disclosed that his previous accounting officer has been using the Straight Line Method for the past 3 years, and he wants to continue with it for all except that he would want you to use the reducing balance method for the Plant and Machinery.

Theory Questions On Depreciating in Accounting (Set 2)

1. Explain how depreciation is treated (indicate the accounting entries to be made after calculating depreciation)
2. Give three instances under which the Disposal of Assets will occur.
3. What is the principle behind calculating the profit or loss on disposal?
4. Explain three reasons why business charge depreciation.

Calculation Questions On Depreciating in Accounting (Set 3)

As an accounting officer working for Koolchop Ltd, you have been provided with the following details on plant and machinery.

a. Plant and Machinery as well as Motor Van accounts are maintained at cost.

b. The company maintains a separate depreciation provision account for each asset.

c. Plant and Machinery is to be depreciated at 10% per annum while motor vehicle is depreciated at 15% per annum.

d. The reducing balance method is used by the company.

d. The financial year of the company ends on December 31st.

The transactions relating to the assets under consideration by Koolchop are as follows.

You are required by the firm to show the

i. Plant and machinery accounts [6 marks]

ii. Motor vehicle Accounts [6 marks]

iii. Provision for depreciation on plant and machinery  [8 marks]

iv. Provision for depreciation on motor vehicles [6 marks]

READ: WASSCE Business Management Sample Questions for Students (Set A)

We hope our Accounting Questions on Depreciation for WASSCE Business Students helps learners to revise the basics of the topic.