Question Tag: Motor Vehicle

Search 500 + past questions and counting.
Professional Bodies Filter
Program Filters
Subject Filters
More
Tags Filter
More
Check Box – Levels
Series Filter
More
Topics Filter
More
  • 1 Marks

FA – MAY 2015 – L1 – SA – Q3 – Correction of Errors

Determine the journal entries to correct an error involving telephone and motor vehicle expenses.

A draft financial statement of DS Enterprises revealed that an amount of N10,000 expended on repairs of telephone was recorded as motor vehicle expenses. State the entries to reverse this error.
A. Dr. Motor vehicle expenses account, Cr. Telephone expenses account
B. Dr. Telephone expenses account, Cr. Suspense account
C. Dr. Motor vehicle account, Cr. Suspense account
D. Dr. Telephone expenses account, Cr. Motor vehicle expenses account
E. Dr. Suspense account, Cr. Telephone expenses account

Answer: D
Explanation:
The error involves the misclassification of expenses. The correct journal entry is to debit the telephone expenses account and credit the motor vehicle expenses account to rectify the misposting.

  • 1 Marks

FA – MAY 2015 – L1 – SA – Q2 – Depreciation Methods and Accounting for Disposals

Determine the second-year depreciation using the sum-of-the-years-digits method.

On 1 January 2013, a motor vehicle with an expected useful life span of 5 years and a residual value of N100,000 was acquired for N1,600,000. Using the sum-of-the-years-digits method, what is the second-year depreciation provision of the motor vehicle?
A. N400,000
B. N426,000
C. N530,000
D. N540,000
E. N600,000

Answer: A
Explanation:
The sum-of-the-years-digits method applies fractions of the remaining useful life to calculate depreciation. For a 5-year asset, the sum of the digits is 15 (5+4+3+2+1). The second year uses the fraction 4/15 of the depreciable amount (N1,600,000 – N100,000), which gives N400,000 as the depreciation for the second year.

 

Take control of your business data with insight and in-depth understanding by taking this course. 

Services

Contact Info

  • +233203701923
    +233543919232
  • info@noohrabusiness.com

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope