PRC-1 · Chapter 6 · Question 97 of 100
A business extracts an unadjusted trial balance. The 'Equipment' account has a debit balance of Rs. 200,000. This figure represents:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The historical cost of the equipment.
Explanation
In standard accounting ledgers, the main asset account (Equipment) holds the historical cost. Accumulated depreciation is kept in a separate contra account.
More Property, Plant and Equipment MCQs
- Q99A company buys a vehicle for Rs. 50,000. It expects to sell it for Rs. 10,000 after 4 years. In year 3, the vehicle is destroyed in an…
- Q100Which of the following is the fundamental basis for the 'Going Concern' concept regarding PPE?
- Q1According to IAS 16, which of the following criteria must be met for an item to be classified as Property, Plant, and Equipment (PPE)?
- Q2Which of the following assets should NOT be classified as Property, Plant, and Equipment?
- Q3At what point should an entity COMMENCE the depreciation of an item of property, plant, and equipment?