Neco 2019 Financial Accounting Question 5

Practice objective / multiple choice question 5 from the 2019 Neco Financial Accounting examination.

Neco 2019 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 5 NECO • 2019 • FINANCIAL_ACCOUNTING • objective

A delivery van was purchased on 1 January for \(\text{₦}2,400,000\). The company uses the diminishing‑balance method at a rate of 25 % per annum. After three full years the van was sold on 1 January for \(\text{₦}1,200,000\).\n(a) Calculate the accumulated depreciation at the date of sale.\n(b) Determine the book value of the van immediately before the sale.\n(c) State the gain or loss on the sale.

Answer Options

Correct Answer A. Accumulated depreciation = 1,387,500; Book value = 1,012,500; Gain = 187,500
B. Accumulated depreciation = 1,387,500; Book value = 1,012,500; Gain = 212,500
C. Accumulated depreciation = 1,171,200; Book value = 1,228,800; Loss = 28,800
D. Accumulated depreciation = 1,800,000; Book value = 600,000; Gain = 600,000
Correct Answer
A
Correct Option:
Accumulated depreciation = 1,387,500; Book value = 1,012,500; Gain = 187,500

About This Question

This is Neco 2019 Financial Accounting Question 5. It is one of the objective questions from the 2019 Neco Financial Accounting examination.

Difficulty level: Medium .

View More Neco 2019 Financial Accounting Questions More Neco Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support