Accountancy MCQs
Topic Notes: Accountancy
General Description
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
1
Under the annuity method of depreciation, how is the annual depreciation charge determined?
Answer:
Annuity tables
The annuity method treats the cost of an asset as an investment that earns interest. To calculate the equal annual depreciation charge, one must use annuity tables, which provide the necessary factors to distribute the asset's cost over its useful life while accounting for the interest component on the unrecovered balance.
2
Which resource is typically used to determine the annuity factor for financial calculations?
Answer:
Annuity tables
Annuity tables are specifically designed to provide pre-calculated factors for the present value or future value of an annuity. These factors simplify the process of calculating periodic payments or the value of a series of equal payments over a specific time period at a given interest rate, avoiding complex manual exponentiation.