ICAEW ACA ACCOUNTING 2024
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
Double entry for depreciation - ANSWERS-Dr Depreciation Expense (SPL)
Cr Accumulated Depreciation (SFP)
QUESTION 2
Estimates made by management when accounting for depreciation - ANSWERS-•
Depreciation Method
• Residual Value
• Useful Economic Life
QUESTION 3
Ways to reduce manipulation of depreciation - ANSWERS-Review:
• Depreciation method - reflect pattern of use of asset
• Residual Value - change with expectations
• Carrying amount - adjusted to new estimates
QUESTION 4
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PAGE 1
, ICAEW ACA ACCOUNTING 2024
Disposal through a part exchange agreement - ANSWERS-1) Remove original cost
of NCA from its account
2) Remove Acc.depr on NCA from its account
3) Record part exchange allowance as proceeds & as part of cost of new asset.
3) Record cash balance paid for asset
QUESTION 5
Disposal for cash consideration - ANSWERS-1) Remove the original cost of NCA
from its account.
2) Remove Acc. depreciation on the NCA from the Acc. Depr account
3) Record the cash proceeds.
QUESTION 6
Meaning of Impairment - ANSWERS-• The value of the asset is less than its
carrying amount.
• Additional depreciation charge is made to the SPL to write it to its impaired
value.
• No alteration to the cost account; Acc.depr account will reflect the higher
depreciation charge.
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, ICAEW ACA ACCOUNTING 2024
QUESTION 7
Non-current asset register - ANSWERS-• A list of all the non-current assets of the
business.
• Broken down normally by location and asset type.
• Maintained in order to control NCAs and keep track of what is owned and where
it is kept.
QUESTION 8
Intangible non-current assets - ANSWERS-Assets held for the long term which
have no physical form.
e.g Patents, Copyrights, Licences
QUESTION 9
Properties of Intangible Assets - ANSWERS-• If they have a useful life - they are
amortised over the useful life.
• The amortisation is an expense in SPL.
• Internally generated intangibles do not appear on SFP as too difficult to climate
value.
QUESTION 10
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PAGE 3
ANSWER ALL QUESTIONS IN THIS SECTION
QUESTION 1
Double entry for depreciation - ANSWERS-Dr Depreciation Expense (SPL)
Cr Accumulated Depreciation (SFP)
QUESTION 2
Estimates made by management when accounting for depreciation - ANSWERS-•
Depreciation Method
• Residual Value
• Useful Economic Life
QUESTION 3
Ways to reduce manipulation of depreciation - ANSWERS-Review:
• Depreciation method - reflect pattern of use of asset
• Residual Value - change with expectations
• Carrying amount - adjusted to new estimates
QUESTION 4
END OF
PAGE 1
, ICAEW ACA ACCOUNTING 2024
Disposal through a part exchange agreement - ANSWERS-1) Remove original cost
of NCA from its account
2) Remove Acc.depr on NCA from its account
3) Record part exchange allowance as proceeds & as part of cost of new asset.
3) Record cash balance paid for asset
QUESTION 5
Disposal for cash consideration - ANSWERS-1) Remove the original cost of NCA
from its account.
2) Remove Acc. depreciation on the NCA from the Acc. Depr account
3) Record the cash proceeds.
QUESTION 6
Meaning of Impairment - ANSWERS-• The value of the asset is less than its
carrying amount.
• Additional depreciation charge is made to the SPL to write it to its impaired
value.
• No alteration to the cost account; Acc.depr account will reflect the higher
depreciation charge.
END OF
PAGE 2
, ICAEW ACA ACCOUNTING 2024
QUESTION 7
Non-current asset register - ANSWERS-• A list of all the non-current assets of the
business.
• Broken down normally by location and asset type.
• Maintained in order to control NCAs and keep track of what is owned and where
it is kept.
QUESTION 8
Intangible non-current assets - ANSWERS-Assets held for the long term which
have no physical form.
e.g Patents, Copyrights, Licences
QUESTION 9
Properties of Intangible Assets - ANSWERS-• If they have a useful life - they are
amortised over the useful life.
• The amortisation is an expense in SPL.
• Internally generated intangibles do not appear on SFP as too difficult to climate
value.
QUESTION 10
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PAGE 3
