With the straight line method of depreciation, the estimated disposal value should not be allowed for in calculating the annual depreciation provision.

The balance sheet will show the total of debtor after the provision for doubtful debts being deducted.

Depreciation provision account has a credit balance.

Straight line method is also termed the fixed …………..method.

The asset account balance is reduced when the asset is sold or……….

Bad debts written off are not shown in the balance sheet.

Any debt written off must be charged against the profit by means of a ……….entry in the profit and loss account.

The word ‘estimate’ in allowing for depreciation of fixed assets means that you are estimating the working……….of the asset.

Depreciation is the estimate of the …………in value of fixed assets over a period of time.

Expenditure incorrectly treated as revenue expenditure will understate expenses and increase profits.

Capital expenditure is the money spent on the ………… of fixed assets or on improvements to fixed assets.

Revenue expenditure is the day-to-day …………. costs of a business.

The main difference between the two types of expenditure is the ………… of time the expenditure is of benefit to the business.

Costs of business belong to capital expenditure.

Revenue expenditure is chargeable to the trading and profit and loss account.

Revenue expenditure is chargeable to the trading and profit and loss account while capital expenditure results in ………… figures for the balance sheet.

Expenditure incorrectly treated as capital expenditure will overstate the assets on the balance sheet.

Expenditure incorrectly treated as capital expenditure will overstate the …………… on the balance sheet.

Capital expenditure decreases the figure of assets in the balance sheet.

Where business ………… (e.g. telephone) are used for the owner’s personal use, this is also regarded as drawings, and adjustments must be made at the end of the year to reflect this.