Which of the following items qualifies as property, plant and equipment?
Ans c
The "carrying amount" of an item of property, plant and equipment generally refers to:
Ans a
A company pays £40,000 to replace a major component of a factory machine. The faulty component that is replaced is sold for £2,000. The carrying amount of the machine just before this replacement occurs is £450,000, of which £10,000 relates to the faulty component that is being replaced. The revised carrying amount of the machine after the replacement occurs and the profit or loss on disposal of the faulty component are:
Ans a
Which of the following would not be included in the cost of an item of property, plant and equipment?
Ans c
On 31 December 2014, a company acquires land for £500,000. The land is revalued at £530,000 on 31 December 2015 and £460,000 on 31 December 2016. The company prepares financial statements to 31 December each year and uses the revaluation model in relation to land. The correct accounting treatment of each revaluation in the statement of comprehensive income is as follows:
Ans d
Depreciation is defined as the fall in value of an asset during an accounting period. True or False?
False
On 1 January 2015, a company which prepares financial statements to 31 December each year buys an item of equipment for £20,000. Useful life is estimated to be six years and residual value is expected to be approximately £1,500. The company uses the diminishing balance method of depreciation at a rate of 35% per annum. To the nearest pound, the depreciation of this item for the year to 31 December 2016 would be:
Ans c
Borrowing costs that are directly attributable to the acquisition of a qualifying asset must be capitalised as part of the cost of that asset. True or False?
Ans True
A company has the following general borrowings outstanding throughout the whole of an accounting year: 6.5% Bank loan of £400,000 8% Bank loan of £800,000 If a qualifying asset costing £50,000 is funded out of these general borrowings, the capitalisation rate that should be used is:
Ans d
If investment property is measured using the fair value model, a gain arising from a change in the fair value of an investment property must be:
Ans c
If a company adopts the revaluation method in relation to an item of property, plant and equipment, it is no longer necessary to charge depreciation in relation to that item. True or False?
False
On 1 January 2015, a company which prepares financial statements to 31 December acquires an item of equipment and receives a government grant of 20% of the item's cost. The item cost £30,000 and has an expected useful life of seven years with a residual value of approximately £4,000. The item is depreciated on the diminishing balance basis at a rate of 25% per annum. The amount of the grant that should be recognised as income in the year to 31 December 2016 is:
Meaning of Work Certified When contractor takes the contract to complete any construction work, it may complete in 4 or 5 years. but contractor has to pay different expenses for material, labor and others. So, it is very necessary to pay him some money of contract. This money is given on the basis of work done. So, any part of construction which is completed by contractor will be work certified if it is certified by an authority. Authority may be independent engineer or architect who can estimated the work. He will issue the certificate of work done after certifying the work of construction. On this work certified, contractor has right to get money of contract. Meaning of Work Uncertified Work uncertified means work done but not certified by authority. So, contractee will cut some money on the basis of work uncertified and will keep in his pocket. This will be retention money. Accounting Treatment of Work Certified and Work Uncertified (I) Work certified and work unce
The Sale of Goods Act, identifies the terms, ‘Conditions’ and ‘Warranties’ as being of a prime significance in a contract of sale. Both the terms imply a promise that is made by the seller. However, the difference between Conditions and Warranties arises due to the nature of the promise that is made in each case. In the case of ‘Condition’ the impact is on the very essence of the contract; whereas, in the case of ‘Warranty’, the promise is in the nature of a collateral to the main purpose of the contract. It is thus evident that if there is a breach of either, a condition or a warranty, the effects will be different. Illustration 1: Sita bought a wet grinder from an electric shop. The purpose for which the grinder was to be used was known to the seller. The grinder was unfit for the purpose. In this case there is a breach of an express condition by the electric shop and Sita is entitled to return the grinder and be refunded the money paid. Illustration 2: Varuna bought a
THE ECOMMERCE SECURITY ENVIRONMENT What is eCommerce Security? eCommerce security refers to the principles which guide safe electronic transactions, allowing the buying and selling of goods and services through the Internet, but with protocols in place to provide safety for those involved. Successful business online depends on the customers’ trust that a company has eCommerce security basics in place. Privacy One of the most obvious eCommerce security basics is privacy, which in this situation means not sharing information with unauthorized parties. When you shop online, your personal details or account information should not be accessible to anyone except the seller you have chosen to share it with. Any disclosure of that information by the merchant would be a breach of confidentiality. The business is responsible to provide at least the minimum in encryption, virus protection, and a firewall so that bank details and credit card information remain private. Integrity A s
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