Fixed Assets is one of 9 topics in the Grade 12 Accounting CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. The straight-line depreciation method calculates depreciation as a fixed percentage of:
The asset's original cost price, giving equal depreciation every year
The asset's carrying value, giving a different amount every year
The asset's selling price
The asset's accumulated depreciation only
Answer: The asset's original cost price, giving equal depreciation every year — Straight-line depreciation applies a fixed rate to the unchanging original cost price, so the rand amount of depreciation is identical every year.
Easy
2. The diminishing balance method calculates depreciation as a fixed percentage of:
The asset's carrying value, so the depreciation amount decreases each year
The asset's original cost price, giving equal depreciation every year
The asset's selling price only
A fixed rand amount regardless of value
Answer: The asset's carrying value, so the depreciation amount decreases each year — Diminishing balance applies the rate to the shrinking carrying value (cost less accumulated depreciation), so the depreciation charge gets smaller each successive year.
Medium
3. A vehicle costs R200 000 and is depreciated at 10% per annum on cost using the straight-line method. Calculate the annual depreciation, in rand.
Answer: 20000 — Straight-line depreciation = Cost x Rate = 200000 x 0,10 = R20 000 per year.
