BSNS 115: Financial Accounting:
Depreciation Part 4 And Part 6
Questions with Complete Answers.
LEARNING OBJECTIVE
What are the two things you should know in this Module? (2 items) - Answer 1.) Explain
Depreciation, Accumulated Depreciation, and Different Depreciation Method
2.) Outline the effect that accounting policy, estimates, and judgements can have on the
financial Statements
What are two items that help explain the concept of depreciation? - Answer 1. ) It is a further
result of accrual basis
2.) Amount charged in an accounting year is not the amount paid in the year, but the amount
that relates to the year (accrual)
UNDERSTAND - Depreciation
"When a company buys goods of significant value that are not to be used up in the current year
(non-current asset), we take account of expected wearing out (depreciation) for the current
year. - Answer No definition, just understand! :) Maybe restate it to help understand if you
need.
What items are subject to depreciation? (1 group of items *hint: _ _ & _) - Answer 1. )
Property, Plant, and Equipment
There are two seperate parts to depreciation, what are they? (2 items) - Answer 1. )
Depreciation Expense
2.) Accumulated Depreciation
What is Amortisation? (1 item) - Answer The systematic allocation of the cost of a tangible
(intangible) asset over its useful life
Amortisation: When is it recorded? (1 item) - Answer Recorded in every Accounting period as
an expense
Amortisation: Where is it recorded (1 item) - Answer It is recorded in the Income Statement
What is Accumulated Depreciation? (1 item) - Answer Is the total depreciation that has been
charged to statement of profit or loss in relation to an asset.
Depreciation Part 4 And Part 6
Questions with Complete Answers.
LEARNING OBJECTIVE
What are the two things you should know in this Module? (2 items) - Answer 1.) Explain
Depreciation, Accumulated Depreciation, and Different Depreciation Method
2.) Outline the effect that accounting policy, estimates, and judgements can have on the
financial Statements
What are two items that help explain the concept of depreciation? - Answer 1. ) It is a further
result of accrual basis
2.) Amount charged in an accounting year is not the amount paid in the year, but the amount
that relates to the year (accrual)
UNDERSTAND - Depreciation
"When a company buys goods of significant value that are not to be used up in the current year
(non-current asset), we take account of expected wearing out (depreciation) for the current
year. - Answer No definition, just understand! :) Maybe restate it to help understand if you
need.
What items are subject to depreciation? (1 group of items *hint: _ _ & _) - Answer 1. )
Property, Plant, and Equipment
There are two seperate parts to depreciation, what are they? (2 items) - Answer 1. )
Depreciation Expense
2.) Accumulated Depreciation
What is Amortisation? (1 item) - Answer The systematic allocation of the cost of a tangible
(intangible) asset over its useful life
Amortisation: When is it recorded? (1 item) - Answer Recorded in every Accounting period as
an expense
Amortisation: Where is it recorded (1 item) - Answer It is recorded in the Income Statement
What is Accumulated Depreciation? (1 item) - Answer Is the total depreciation that has been
charged to statement of profit or loss in relation to an asset.
