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The Finance Director of EFG company has made the following statements regarding the recording of expenditure relating to the entity's property, plant and equipment (PPE) in the nominal ledger.
Which THREE of the following statements are true?
Suggested Answer: A, C, F
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38 comments · newest first
DO
Dorothea
11 months ago
Surprised to see how depreciation affects profit!
AN
Antonio
11 months ago
D is right, but E is totally wrong!
QU
Queen
11 months ago
Wait, is B really correct? Sounds off to me.
MA
Malissa
12 months ago
I agree, F is also true.
AL
Alecia
12 months ago
A and C are definitely true!
FR
Frederic
1 year ago
I’m pretty confident that the annual depreciation charge reduces the carrying value of PPE, but I’m unsure about the repainting expense.
JO
Josefa
1 year ago
The insurance cost for the factory seems like it should be an expense, not debited to PPE. I feel like I've seen a similar question before.
LE
Leigha
1 year ago
I think the loss on disposal definitely reduces profit, but I can't recall if it goes into a liability account or not.
NO
Novella
1 year ago
I remember that depreciation does reduce profit, but I'm not sure if it affects the carrying value too.
DE
Dean
1 year ago
This is a good test of my understanding of PPE accounting. I'll methodically go through each statement, applying my knowledge of the relevant principles. I'm feeling pretty good about being able to identify the three true statements.
AB
Abel
1 year ago
I'm a little confused by the wording of some of these statements. I'll need to re-read them closely and make sure I'm interpreting them correctly before selecting the true ones. Accounting principles can be tricky, so I'll need to stay focused.
LI
Linwood
1 year ago
Okay, I've got this. The annual depreciation charge and loss on disposal both reduce profit, while the cost of insurance is not recorded in the PPE account. I'm confident I can identify the three true statements here.
CR
Cristina
1 year ago
Hmm, I'm a bit unsure about this one. The statements seem to cover a range of different PPE-related transactions, and I'll need to make sure I understand the proper accounting for each. I'll need to think through the concepts carefully.
AD
Adrianna
1 year ago
This looks like a straightforward accounting question on the treatment of PPE-related expenses. I'll need to carefully review each statement and think through the accounting principles to determine which ones are true.
LI
Ling
1 year ago
This seems straightforward to me. Vetting is the right term for the process of thoroughly evaluating a candidate's skills and integrity to determine if they are the best fit. I'll go with option C.
HE
Helga
1 year ago
This looks like a tricky one. I'll need to carefully analyze the code fragment and the options to determine which one will print 135.
MI
Mila
1 year ago
I'm not 100% sure, but I think the correct answers are A and B. The other options seem to have some issues with the file name.
ER
Erick
1 year ago
Isn't tracking the source IP a good tactic? I think it might help by focusing on the source of brute force attempts. Not quite sure though!
LI
Lindy
2 years ago
Wait, so the Finance Director is basically testing us on our ability to differentiate between capital and revenue expenditures? Sounds like a real *asset* of a question!
NG
Nguyet
2 years ago
E is just plain wrong. The loss on disposal is not recorded in a liability account, that's ridiculous!
BR
Brent
2 years ago
D is a good one. The cost of repainting the office should be expensed, not capitalized.
BA
Barrett
2 years ago
D) The cost of repainting the office is credited to the repairs expense account.
RO
Roosevelt
2 years ago
B) The cost of insurance for the factory is debited to the PPE asset account.
MA
Margurite
2 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
DU
Dusti
2 years ago
B is a strange one. Why would the cost of insurance be debited to the PPE account? That doesn't make any sense.
DO
Donte
2 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
DO
Domonique
2 years ago
E) The loss on the disposal of PPE is recorded in a liability account
GI
Gilma
2 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
AM
Amber
2 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
LY
Lynelle
2 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
CE
Cecilia
2 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
SH
Sherly
2 years ago
A) The annual depreciation charge reduces EFG's profit for the year.
PE
Pearly
2 years ago
A, C, and F are correct. The depreciation charge and loss on disposal reduce profit, and depreciation reduces the carrying value of PPE.
SH
Shad
2 years ago
The cost of repainting the office is credited to the repairs expense account.
DO
Dorthy
2 years ago
F) The annual depreciation charge reduces the carrying value of PPE
PA
Pansy
2 years ago
C) The loss on the disposal of PPE reduces EFG's profit for the year
SH
Shad
2 years ago
The depreciation charge and loss on disposal reduce profit, and depreciation reduces the carrying value of PPE.
CL
Clorinda
2 years ago
A) The annual depreciation charge reduces EFG's profit for the year.