ACCA F6: Capital Allowances! Trivia Questions Quiz
- 1.
Which of the following is not a plant and is considered as building?
- A.
Walls, floors, ceilings, doors, gates, shutters, windows and stairs
- B.
Mains services and systems of water, electricity and gas
- C.
Waste disposal, sewerage and drainage systems
- D.
Sound insulation provided mainly to meet the particular requirements of the trade
Correct Answer
D. Sound insulation provided mainly to meet the particular requirements of the tradeExplanation
Explanation: Statute describes this as plant.Rate this question:
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- 2.
Which of the following does not qualify as plant?
- A.
Computer software
- B.
Service agreement for maintenance
- C.
Internet browser
- D.
Soft data
Correct Answer
B. Service agreement for maintenanceExplanation
Explanation: Computer software and data purchased qualifies as Plant & Machinery and not the hardware.Rate this question:
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- 3.
Capital allowance is available at 20% on general pool on:
- A.
Reducing Balance Method
- B.
Straight Line Method
- C.
Machine Hours Method
- D.
Any method acceptable in GAAP
Correct Answer
A. Reducing Balance MethodExplanation
Explanation: Only reducing balance method is allowed.Rate this question:
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- 4.
Annual Investment Allowance (AIA) is available to all business of £________.
- A.
50,000
- B.
100,000
- C.
110,000
- D.
1,000,000
Correct Answer
B. 100,000Explanation
Explanation: The allowance is available for a period of 12 months of £100,000.Rate this question:
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- 5.
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?
- A.
£4,000
- B.
£24,000
- C.
£100,000
- D.
£104,000
Correct Answer
D. £104,000Explanation
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.Rate this question:
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- 6.
If the period of account is 13 months, the AIA will be:
- A.
£100,000
- B.
£105,000
- C.
£108,333
- D.
£110,000
Correct Answer
C. £108,333Explanation
Explanation: £100,000 AIA is for 12 months period and is adjusted accordingly.Rate this question:
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- 7.
First Year Allowance (FYA) is available on cars below the CO2 emission of _______ g/km or less.
- A.
160
- B.
120
- C.
110
- D.
75
Correct Answer
C. 110Explanation
Explanation: Cars with CO2 emission of 110 g/km or less are entitled to the FYA.Rate this question:
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- 8.
Writing Down Allowance (WDA) on items in the main pool is calculated as:
- A.
No WDA in the year of acquisition of disposal
- B.
Full WDA in the year of acquisition and disposal
- C.
No WDA in the year of acquisition and full WDA in the year of disposal
- D.
Full WDA in the year of acquisition and no WDA in the year of disposal
Correct Answer
D. Full WDA in the year of acquisition and no WDA in the year of disposalExplanation
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.Rate this question:
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- 9.
For short & Long period of accounts, the WDA is:
- A.
Adjusted according to the number of months
- B.
Not adjusted and is always calculated for 12 months
Correct Answer
A. Adjusted according to the number of monthsExplanation
Explanation: WDA is always adjusted according to the duration of the period of account.Rate this question:
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- 10.
FYA is adjusted for short or long period of account?
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Explanation: FYA is not adjusted for short and long period of accounts.Rate this question:
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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.
- A.
Positive
- B.
Nil
- C.
Negative
Correct Answer
C. NegativeExplanation
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.Rate this question:
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- 12.
Balancing allowance arises when at the time of cessation of trade there is ____ balance in the main pool despite all assets being disposed off.
- A.
Positive
- B.
Nil
- C.
Negative
Correct Answer
A. PositiveExplanation
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.Rate this question:
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- 13.
In the year of cessation, the following can be claimed?
- A.
AIA, FYA & WDA
- B.
Only AIA
- C.
FYA and WDA
- D.
None of the above
Correct Answer
D. None of the aboveExplanation
Explanation: No allowance can be claimed in the year of cessation.Rate this question:
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- 14.
Special Rate Pool attracts 10% WDA and hence are included in the special rate pool. These include:
- A.
Thermal insulation, long-life assets, features integral to a building & cars with CO2 emission over 160g/km
- B.
Heating, Electric & Water Systems, long-life assets, features integral to a building & cars with CO2 emission over 160g/km
- C.
Thermal insulation, long-life assets, features integral to a building & cars with CO2 emission over 161g/km
- D.
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/kmExplanation
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.Rate this question:
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- 15.
AIA can be applied to the Special Rate Pool assets except for:
- A.
Thermal insulation
- B.
Long-life assets
- C.
Features integral to a building
- D.
Cars with CO2 emission over 160g/km
Correct Answer
D. Cars with CO2 emission over 160g/kmExplanation
Explanation: AIA cannot be applied to cars.Rate this question:
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- 16.
Long-life assets are the assets with useful life of ___ years or more.
- A.
15
- B.
20
- C.
25
- D.
30
Correct Answer
C. 25Explanation
Explanation: Rule is 25 years.Rate this question:
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- 17.
Plants not treated as long-life assets are cars and:
- A.
Plant & Machinery in dwelling houses, showrooms, hotels and offices
- B.
Plant & Machinery in dwelling houses, retail shops, hotels and offices
- C.
Plant & Machinery in dwelling houses, retail shops, showrooms and hotels
- D.
Plant & Machinery in dwelling houses, retail shops, showrooms, hotels and offices
Correct Answer
D. Plant & Machinery in dwelling houses, retail shops, showrooms, hotels and officesExplanation
Explanation: Plants not treated as long-life assets are cars and Plant & Machinery in dwelling houses, retail shops, showrooms, hotels and offices.Rate this question:
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- 18.
Features integral to building includes:
- A.
Electrical & lighting systems, cold water systems and space/ water heating systems
- B.
Powered system of ventilation, cooling or air conditioning, lifts and escalators
- C.
Both the above
- D.
None of the above
Correct Answer
C. Both the aboveExplanation
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.Rate this question:
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- 19.
Capital allowances for assets with private use is dealt:
- A.
By keeping in a single asset pool
- B.
By keeping them in special rate pool
- C.
By charging 5% WDA
- D.
By reducing the value of such assets in proportion to private use
Correct Answer
A. By keeping in a single asset poolExplanation
Explanation: Assets with private use are kept in a single asset pool.Rate this question:
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- 20.
A car was purchased on 1.1.2008 with no private use. The maximum WDA that can be claimed is:
- A.
20% of the cost of the car
- B.
20% of the value of the car
- C.
£3,000
- D.
£1,500
Correct Answer
C. £3,000Explanation
Explanation: 20% WDA is applied on cars purchased before April 2009 with a limit of £3,000 WDA.Rate this question:
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- 21.
For cars purchased after 5 April 2009 with CO2 emission of ____g/km or less, FYA of 100% can be claimed.
- A.
76
- B.
110
- C.
120
- D.
160
Correct Answer
B. 110Explanation
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.Rate this question:
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- 22.
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.
- A.
4
- B.
6
- C.
8
- D.
10
Correct Answer
C. 8Explanation
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.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 27, 2012Quiz Created by
LFTC2011
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