ACCA F6: Capital Allowances! Trivia Questions Quiz

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  • 1/22 Questions

    For short & Long period of accounts, the WDA is:

    • Adjusted according to the number of months
    • Not adjusted and is always calculated for 12 months
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About This Quiz

This ACCA F6 trivia quiz focuses on Capital Allowances, testing knowledge on plant and building classifications, qualifying expenses, and calculation methods like AIA. It is essential for finance professionals preparing for ACCA certification.

ACCA F6: Capital Allowances! Trivia Questions Quiz - Quiz

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  • 2. 

    Balancing allowance arises when at the time of cessation of trade there is ____ balance in the main pool despite all assets being disposed off.

    • Positive

    • Nil

    • Negative

    Correct Answer
    A. Positive
    Explanation
    Explanation: Balancing allowance means that after disposal and WDAs, there is still balance remaining in the main pool hence lesser WDAs are claimed. This will be treated as expense.

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  • 3. 

    If the period of account is 13 months, the AIA will be:

    • £100,000

    • £105,000

    • £108,333

    • £110,000

    Correct Answer
    A. £108,333
    Explanation
    Explanation: £100,000 AIA is for 12 months period and is adjusted accordingly.

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  • 4. 

    FYA is adjusted for short or long period of account?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Explanation: FYA is not adjusted for short and long period of accounts.

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  • 5. 

    Which of the following does not qualify as plant?

    • Computer software

    • Service agreement for maintenance

    • Internet browser

    • Soft data

    Correct Answer
    A. Service agreement for maintenance
    Explanation
    Explanation: Computer software and data purchased qualifies as Plant & Machinery and not the hardware.

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  • 6. 

    AIA can be applied to the Special Rate Pool assets except for:    

    • Thermal insulation

    • Long-life assets

    • Features integral to a building

    • Cars with CO2 emission over 160g/km

    Correct Answer
    A. Cars with CO2 emission over 160g/km
    Explanation
    Explanation: AIA cannot be applied to cars.

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  • 7. 

    Capital allowance is available at 20% on general pool on:

    • Reducing Balance Method

    • Straight Line Method

    • Machine Hours Method

    • Any method acceptable in GAAP

    Correct Answer
    A. Reducing Balance Method
    Explanation
    Explanation: Only reducing balance method is allowed.

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  • 8. 

    For cars purchased after 5 April 2009 with CO2 emission of ____g/km or less, FYA of 100% can be claimed.

    • 76

    • 110

    • 120

    • 160

    Correct Answer
    A. 110
    Explanation
    Explanation: 100% FYA can be claimed in respect of cars purchased from April 2009 with CO2 emission of 110g/km or less. If full FYA is not claimed, the remaining balance is transferred to the general pool.

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  • 9. 

    Writing Down Allowance (WDA) on items in the main pool is calculated as:

    • No WDA in the year of acquisition of disposal

    • Full WDA in the year of acquisition and disposal

    • No WDA in the year of acquisition and full WDA in the year of disposal

    • Full WDA in the year of acquisition and no WDA in the year of disposal

    Correct Answer
    A. Full WDA in the year of acquisition and no WDA in the year of disposal
    Explanation
    Explanation: In the year in which the asset is acquired, Full WDA is provided while Nil in the year of disposal, irrespective of how many months the asset was used.

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  • 10. 

    Annual Investment Allowance (AIA) is available to all business of £________.

    • 50,000

    • 100,000

    • 110,000

    • 1,000,000

    Correct Answer
    A. 100,000
    Explanation
    Explanation: The allowance is available for a period of 12 months of £100,000.

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  • 11. 

    Balancing charge arises when at the time of cessation of trade there is ____ balance in the main pool despite all assets being disposed off.

    • Positive

    • Nil

    • Negative

    Correct Answer
    A. Negative
    Explanation
    Explanation: Balancing charge means that after disposal and WDAs, there is a negative balance in the main pool hence excess WDAs are claimed. This will be a negative expense.

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  • 12. 

    Features integral to building includes:

    • Electrical & lighting systems, cold water systems and space/ water heating systems

    • Powered system of ventilation, cooling or air conditioning, lifts and escalators

    • Both the above

    • None of the above

    Correct Answer
    A. Both the above
    Explanation
    Explanation: Electrical & lighting systems, cold water systems, space/ water heating systems, powered system of ventilation, cooling or air conditioning, lifts and escalators are features considered integral to building.

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  • 13. 

    Long-life assets are the assets with useful life of ___ years or more.

    • 15

    • 20

    • 25

    • 30

    Correct Answer
    A. 25
    Explanation
    Explanation: Rule is 25 years.

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  • 14. 

    In the year of cessation, the following can be claimed?

    • AIA, FYA & WDA

    • Only AIA

    • FYA and WDA

    • None of the above

    Correct Answer
    A. None of the above
    Explanation
    Explanation: No allowance can be claimed in the year of cessation.

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  • 15. 

    Special Rate Pool attracts 10% WDA and hence are included in the special rate pool. These include:

    • Thermal insulation, long-life assets, features integral to a building & cars with CO2 emission over 160g/km

    • Heating, Electric & Water Systems, long-life assets, features integral to a building & cars with CO2 emission over 160g/km

    • Thermal insulation, long-life assets, features integral to a building & cars with CO2 emission over 161g/km

    • Thermal insulation, short-life assets, features integral to a building & cars with CO2 emission over 160g/km

    Correct Answer
    A. Thermal insulation, long-life assets, features integral to a building & cars with CO2 emission over 160g/km
    Explanation
    Explanation: Thermal insulation, long-life assets, features integral to a building & cars with CO2 emission over 160g/km attract 10% WDA and are included in the Special Rate Pool.

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  • 16. 

    First Year Allowance (FYA) is available on cars below the CO2 emission of _______ g/km or less.

    • 160

    • 120

    • 110

    • 75

    Correct Answer
    A. 110
    Explanation
    Explanation: Cars with CO2 emission of 110 g/km or less are entitled to the FYA.

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  • 17. 

    Plants not treated as long-life assets are cars and:

    • Plant & Machinery in dwelling houses, showrooms, hotels and offices

    • Plant & Machinery in dwelling houses, retail shops, hotels and offices

    • Plant & Machinery in dwelling houses, retail shops, showrooms and hotels

    • Plant & Machinery in dwelling houses, retail shops, showrooms, hotels and offices

    Correct Answer
    A. Plant & Machinery in dwelling houses, retail shops, showrooms, hotels and offices
    Explanation
    Explanation: Plants not treated as long-life assets are cars and Plant & Machinery in dwelling houses, retail shops, showrooms, hotels and offices.

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  • 18. 

    If a trader purchases an asset that is intended to be sold within ____ years of the end of the accounting period when it was acquired, the asset can be kept in single asset pool.

    • 4

    • 6

    • 8

    • 10

    Correct Answer
    A. 8
    Explanation
    Explanation: Assets purchased after 5 April 2011 intended to be sold within 8 years after the end of accounting period of purchase can be elected as short life asset and kept in single asset pool.

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  • 19. 

    Capital allowances for assets with private use is dealt:

    • By keeping in a single asset pool

    • By keeping them in special rate pool

    • By charging 5% WDA

    • By reducing the value of such assets in proportion to private use

    Correct Answer
    A. By keeping in a single asset pool
    Explanation
    Explanation: Assets with private use are kept in a single asset pool.

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  • 20. 

    Alpha purchased Plant for £120,000. All is subject to AIA. What is the total of Capital Allowances that can be claimed during the year?

    • £4,000

    • £24,000

    • £100,000

    • £104,000

    Correct Answer
    A. £104,000
    Explanation
    Explanation: The Annual Investment Allowance of £100,000 and 20% allowance of remaining £20,000 (20,000 X 20% = 4,000) makes it £104,000.

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  • 21. 

    Which of the following is not a plant and is considered as building?

    • Walls, floors, ceilings, doors, gates, shutters, windows and stairs

    • Mains services and systems of water, electricity and gas

    • Waste disposal, sewerage and drainage systems

    • Sound insulation provided mainly to meet the particular requirements of the trade

    Correct Answer
    A. Sound insulation provided mainly to meet the particular requirements of the trade
    Explanation
    Explanation: Statute describes this as plant.

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  • 22. 

    A car was purchased on 1.1.2008 with no private use. The maximum WDA that can be claimed is:

    • 20% of the cost of the car

    • 20% of the value of the car

    • £3,000

    • £1,500

    Correct Answer
    A. £3,000
    Explanation
    Explanation: 20% WDA is applied on cars purchased before April 2009 with a limit of £3,000 WDA.

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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 27, 2012
    Quiz Created by
    LFTC2011
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