1 Depreciation is (A) The amount spent to buy a fixed asset (B) The salvage value of a fixed asset (C) The part of the cost of the fixed asset consumed during its period of use by the firm (D) The...

1

Depreciation is

(A) The amount spent to buy a fixed asset

(B) The salvage value of a fixed asset

(C) The part of the cost of the fixed asset consumed during its period of use by the firm

(D) The amount of money spent replacing assets.

2

A firm bought a machine for £3,200. It is to be depreciated at a rate of 25 per cent using

the reducing balance method. What would be the remaining book value after 2 years?

(A) £1,600

(B) £2,400

(C) £1,800

(D) Some other figure.