Waec Model Questions Vol1 2022 Financial Accounting Question 10
Practice objective / multiple choice question 10 from the 2022 Waec Model Questions Vol1 Financial Accounting examination.
A machine was purchased on 1 January 2022 for ₦500,000. Its estimated residual value is ₦50,000 and its estimated useful life is 5 years. The company uses the straight‑line method for financial reporting, while the tax authority requires the reducing‑balance method at a rate of 40 % per annum. Compute: (a) the depreciation expense for the year ended 31 December 2024 (the third year) for financial reporting; (b) the depreciation expense for the same year for tax purposes; (c) the difference between the two charges and indicate which method gives the higher charge.
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About This Question
This is Waec Model Questions Vol1 2022 Financial Accounting Question 10. It is one of the objective questions from the 2022 Waec Model Questions Vol1 Financial Accounting examination.
Difficulty level: Medium .
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