A Sole Trader Owns a Company Vehicle Which Cost £10,000

question 11

Multiple Choice

A Sole Trader owns a company vehicle which cost £10,000 at the beginning of year 1,and is depreciated at 25% reducing balance method.In year 2,the end of year accounts are being drawn up.Which of the following is the correct adjustment for the depreciation of the vehicle?

• A) Annual Depreciation charge of £2,500 shown in the income Statement. On the Statement of Financial Position, the Carrying Amount of the vehicle is £7,500
• B) Annual Depreciation charge of £2,500 shown in the income Statement. On the Statement of Financial Position, the Carrying Amount of the vehicle is £5,000
• C) Annual Depreciation charge of £4,375 shown in the income Statement. On the Statement of Financial Position, the Carrying Amount of the vehicle is £5,625
• D) Annual Depreciation charge of £1,875 shown in the Income Statement. On the Statement of Financial Position, the Carrying Amount of the vehicle is £5,625

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Definitions:

Active Members

Individuals who actively participate and engage in the activities or initiatives of a group or organization.

Community

A group of people living in the same place or having a particular characteristic in common, or a feeling of fellowship with others as a result of sharing common attitudes, interests, and goals.

Planning

The process of making detailed strategies or arrangements ahead of time for achieving specific goals or completing tasks.

Résumé

A document presenting an individual's work history, skills, and educational background to prospective employers.