.8per year on the straight line basis, assuming a residual value at the end of five years of $4,000, with aproportionate depreciation charge in the years of purchase and disposal.A business purchased a motor car on 1 July 20X3 for $20,000. It is to be depreciated at 20 per centThe $20,000 cost was correctly entered in the cash book but posted to the debit of the motor vehiclesrepairs account.How will the business profit for the year ended 31 December 20X3 be affected by the error?Understated by $18,400Understated by $16,800Overstated by $18,400Overstated by $16,800AC(2 marks)

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Description: .8per year on the straight line basis, assuming a residual value at the end of five years of $4,000, with aproportionate depreciation charge in the years of purchase and disposal.A business purchased a motor car on 1 July 20X3 for $20,000. It is to

The errors in accounting that affect the profit are called the error of commission and error of…

Business

Accounting

A business purchased a motor car on 1 July 20OX3 for $20,000. It is to be depreciated at 20 per cent per year on the straight line basis, assuming a residual value at the end of five years of $4,000, with a proportionate depreciation charge in the years of purchase and disposal. The $20,000 cost was correctly entered in the cash book but posted to the debit of the motor vehicles repairs account. How will the business profit for the year ended 31 December 20X3 be affected by the error? Understated by $18,400 Understated by $16,800 Overstated by $18,400 Overstated by $16,800 (2 marks) ABCD

A business purchased a motor car on 1 July 20OX3 for $20,000. It is to be depreciated at 20 per cent per year on the straight line basis, assuming a residual value at the end of five years of $4,000, with a proportionate depreciation charge in the years of purchase and disposal. The $20,000 cost was correctly entered in the cash book but posted to the debit of the motor vehicles repairs account. How will the business profit for the year ended 31 December 20X3 be affected by the error? Understated by $18,400 Understated by $16,800 Overstated by $18,400 Overstated by $16,800 (2 marks) ABCD

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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