OxfordAQA IGCSE Accounting: Capital and revenue, depreciation and disposal (9215) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions follow section 3.3 of the OxfordAQA International GCSE Accounting (9215) specification, version 1.2 (exams from May/June 2026): capital and revenue items, depreciation and disposals. All businesses and figures are invented and all amounts are in dollars. Read the study guide first or check your answers against the revision notes. Other links: course hub, checklist and free diagnostics.

Questions

1. Valdane Dairy buys a refrigerated lorry, pays for diesel for it, and pays for a cold-storage unit to be fitted to the lorry body.

(a) State whether each payment is capital expenditure or revenue expenditure. [3] (b) The accountant wrongly adds 1,800 of diesel to the cost of the lorry. State the effect on profit and on the value of the lorry. [2]

2. Classify each receipt as capital income or revenue income: (i) the owner pays 12,000 into the business bank account; (ii) milk sales; (iii) sale of an old delivery trolley for 450; (iv) rent of 3,000 for letting a spare garage. [4]

3. Explain two reasons why non-current assets depreciate. [4]

4. Fordyce Packaging buys a machine for 27,500. It expects a life of 5 years and a residual value of 2,500, and uses the straight line method.

(a) Calculate the annual depreciation charge. [2] (b) Calculate the provision for depreciation and the net book value at the end of Year 3. [2]

5. Equipment costs 40,000 and is depreciated at 15% a year using the reducing balance method. Calculate the depreciation charge for each of Years 1, 2 and 3, and the net book value at the end of Year 3. [6]

6. Fixtures cost 12,000 and are depreciated at 10% of cost a year. At the start of Year 2 the provision for depreciation is 1,200.

(a) Prepare the provision for depreciation account for Year 2. [4] (b) Show the fixtures in the Year 2 statement of financial position, with cost, provision and net book value. [2]

7. Explain why depreciation is described as a non-cash expense, and state its effect on the value of an asset. [4]

8. A vehicle that cost 22,000 has a provision for depreciation of 14,000. It is sold for 6,200 paid into the bank. Prepare the disposal account and say where the balance is transferred. [6]

9. A machine cost 16,000 on 1 January Year 1. It is depreciated at 12.5% of cost a year, with depreciation charged for each month of ownership. On 31 March Year 4 it is sold for 10,100.

(a) Calculate the provision for depreciation at 31 December Year 3. [2] (b) Calculate the depreciation for Year 4 up to the date of sale. [1] (c) Prepare the disposal account. [3] (d) State the net book value at the date of sale and use it to confirm the profit or loss. [1]

10. Fordyce Packaging bought a machine for 40,000 on 1 January Year 1 and depreciates it at 20% reducing balance, charging a full year in the year of purchase and a full year in the year of sale. The machine is sold on 31 December Year 3 for 17,000. The profit before depreciation and the disposal result is 52,000.

(a) Calculate the provision for depreciation at the start of Year 3. [3] (b) Calculate the depreciation charge for Year 3. [2] (c) Prepare the disposal account. [4] (d) Calculate the profit for Year 3 after depreciation and the disposal result. [1]

Answers

1. (a) Lorry: capital expenditure [1]. Diesel: revenue expenditure [1]. Cold-storage unit: capital expenditure, as it adds to the asset and brings it into use [1]. [3] (b) Profit is overstated by 1,800 because an expense has not been charged [1]. The lorry is overstated by 1,800 [1]. [2] Examiner insight: Answers gain credit when each classification is stated outright; a reason alone, without the word capital or revenue, often leaves the point unmade.

2. (i) Capital income [1]. (ii) Revenue income [1]. (iii) Capital income, as it is the sale of a non-current asset [1]. (iv) Revenue income [1]. [4] Examiner insight: Sale proceeds of a non-current asset are a common trap: calling them revenue income because money was received loses the mark.

3. Wear and tear: use physically damages the asset, so it earns less and eventually fails [1] [1]. Obsolescence: newer technology makes the asset out of date even if it still works [1] [1]. (Passage of time is also acceptable.) [4] Examiner insight: Explain questions usually reward a reason plus a link to the asset; “it gets old” with no cause is thin.

4. (a) (27,500 − 2,500) ÷ 5 [1] = 5,000 [1]. [2] (b) Provision 3 × 5,000 = 15,000 [1]. NBV 27,500 − 15,000 = 12,500 [1]. [2] Examiner insight: Showing the residual value being deducted makes your method visible even if arithmetic slips.

5. Year 1: 15% × 40,000 = 6,000, NBV 34,000 [1]. Year 2: 15% × 34,000 = 5,100 [1], NBV 28,900 [1]. Year 3: 15% × 28,900 = 4,335 [1], NBV 24,565 [1]. Percentage applied to the net book value each year, not to cost [1]. [6] Examiner insight: Writing out each opening NBV shows the method, so one early slip need not cost every later figure.

6. (a)

Provision for depreciation	Debit	Credit
Year 2 balance c/d	2,400
Year 2 balance b/d		1,200
Year 2 depreciation (10% × 12,000)		1,200
Totals	2,400	2,400

Opening balance b/d on the credit side [1]. Charge of 1,200 on the credit side [1]. Closing balance 2,400 [1]. Totals agree [1]. [4] (b) Fixtures cost 12,000 [1]; provision 2,400, net book value 9,600 [1]. [2] Examiner insight: The provision is a credit balance carried forward; marks are lost when the closing balance is shown on the wrong side.

7. No cash is paid out when depreciation is charged; the cash left when the asset was bought [1]. It is an expense, so it reduces profit [1]. Each charge adds to the provision [1], so the net book value of the asset falls [1]. [4] Examiner insight: Strong answers mention both what does not happen (no bank payment) and what does (lower profit and lower asset value).

8.

Debit		Credit
Vehicle at cost	22,000	Provision for depreciation	14,000
		Bank	6,200
		Loss on disposal	1,800
Total	22,000	Total	22,000

Cost on the debit side [1]. Provision on the credit side [1]. Bank on the credit side [1]. Balancing loss of 1,800 on the credit side [1]. Totals of 22,000 [1]. Transferred to the income statement [1]. [6] Examiner insight: Cost and provision go in separately; entering only the net book value of 8,000 changes the layout and risks losing the credit for each.

9. (a) Annual charge 12.5% × 16,000 = 2,000 [1]. Three years: 6,000 [1]. [2] (b) 2,000 × 3/12 = 500 [1]. [1] (c) Provision at sale 6,500.

Debit		Credit
Machine at cost	16,000	Provision for depreciation	6,500
Profit on disposal	600	Bank	10,100
Total	16,600	Total	16,600

Cost 16,000 on the debit side [1]. Provision 6,500 and bank 10,100 on the credit side [1]. Profit of 600 on the debit side [1]. [3] (d) NBV = 16,000 − 6,500 = 9,500; proceeds of 10,100 are 600 more, which is a profit of 600 [1]. [1] Examiner insight: Part-year depreciation needs to be in the provision before the disposal account is opened; leaving out the 500 changes the profit.

10. (a) Year 1: 20% × 40,000 = 8,000 [1]. Year 2: 20% × 32,000 = 6,400 [1]. Provision 14,400 [1]. [3] (b) NBV 25,600 [1]. 20% × 25,600 = 5,120 [1]. [2] (c) Provision at sale 14,400 + 5,120 = 19,520.

Debit		Credit
Machine at cost	40,000	Provision for depreciation	19,520
		Bank	17,000
		Loss on disposal	3,480
Total	40,000	Total	40,000

Cost on the debit side [1]. Provision of 19,520 on the credit side [1]. Bank 17,000 on the credit side [1]. Loss of 3,480 [1]. [4] (d) 52,000 − 5,120 − 3,480 = 43,400 [1]. [1] Examiner insight: In a multi-part question each part feeds the next, so show every intermediate figure; a clear route lets a slip early on be separated from correct method later.

Where marks are usually lost

• Calling a repair or fuel cost capital because the amount is large.
• Treating the proceeds from selling a non-current asset as sales or revenue income.
• Giving “wear and tear” with no explanation of what it does to the asset.
• Leaving the residual value out of the straight line calculation.
• Using cost instead of the opening net book value in the reducing balance calculation.
• Putting the provision balance on the debit side of the provision account.
• Entering the net book value rather than cost and provision in the disposal account.
• Showing a loss on the debit side, or a profit on the credit side.
• Forgetting part-year depreciation before a disposal when the question asks for it.

Next steps

• Review the revision notes and study guide.
• Go to the course hub and tick off the checklist.
• Try all the free 10-minute diagnostics.
• Book a free trial class.

Frequently asked questions

Where do students usually lose marks on depreciation and disposal questions? Common losses are leaving the residual value out of the straight line calculation, using cost instead of the opening net book value for reducing balance, and entering the net book value rather than cost and provision in the disposal account.

Is a large repair capital expenditure? Not because of its size. Calling a repair or fuel cost capital because the amount is large is a common mistake; classify it by its purpose, not its cost.

What should I do if a question asks for depreciation in the year of sale? Charge the part-year depreciation to the provision before you open the disposal account. Forgetting it when the question asks for it is a common mistake.

Which side do the balances go on in a provision for depreciation account? The provision for depreciation has a credit balance. Putting it on the debit side of the provision account loses marks.

Official syllabus

OxfordAQA International GCSE Accounting (9215), specification version 1.2, first teaching 2024, first examined 2026, published by OxfordAQA. Section 3.3, Development of the accounting model.