Which one of the following should be accounted for as capital expenditure?
The cost of painting a building.
The replacement of windows in a building.
The purchase of a car by a garage for re-sale.
Legal fees incurred on the purchase of a building.
A business purchases a machine on credit terms for £15,000 plus value added tax (VAT)at 15%. The business is registered for VAT. How should this transaction be recorded inthe books?
Which one of the following statements most closely expresses the meaning of “true andfair”?
There is only one true and fair view of a company’s financial statements.
True and fair is determined by compliance with accounting standards.
True and fair is determined by compliance with company law.
True and fair is largely determined by reference to generally accepted accounting practice.
On 1 May 2000, A Ltd pays a rent bill of £1,800 for the period to 30 April 2001. What arethe charge to the profit and loss account and the entry in the balance sheet for the yearended 30 November 2000?
£1,050 charge to profit and loss account and prepayment of £750 in the balance sheet.
£1,050 charge to profit and loss account and accrual of £750 in the balance sheet.
£1,800 charge to profit and loss account and no entry in the balance sheet.
£750 charge to profit and loss account and prepayment of £1,050 in the balance sheet.