What this practice covers
These questions are drawn from past CIE 9706 Accounting papers and filtered to depreciation and changing asset values. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on depreciation and changing asset values, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Applying the reducing-balance rate to cost instead of to carrying amount.
- Deducting residual value when calculating reducing-balance depreciation. Residual value is used in the straight-line formula only.
- Saying depreciation sets money aside to replace the asset.
- Crediting the asset account instead of the provision account.
- Ignoring the stated policy on part years.
- Saying depreciation is a valuation of the asset. Carrying amount is very rarely market value.
- Treating the provision for depreciation as a debit balance in the trial balance.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Depreciation and changing asset values revision notes.