This document contains a 25 question multiple choice test on accounting concepts related to buying and selling non-current assets. The test covers topics such as identifying appropriate journals to record asset purchases and sales, classifying asset-related accounts, calculating depreciation amounts, and recording journal entries for asset disposals. It provides detailed asset purchase, sale and disposal scenarios for students to apply their understanding of non-current asset accounting.

1. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 1
Chapter 17 Test – Buying and Selling Non-Current Assets
Name ___________________________________________
Circle the correct response for each question:
1. (a) (b) (c) (d)
2. (a) (b) (c) (d)
3. (a) (b) (c) (d)
4. (a) (b) (c) (d)
5. (a) (b) (c) (d)
6. (a) (b) (c) (d)
7. (a) (b) (c) (d)
8. (a) (b) (c) (d)
9. (a) (b) (c) (d)
10. (a) (b) (c) (d)
11. (a) (b) (c) (d)
12. (a) (b) (c) (d)
13. (a) (b) (c) (d)
14. (a) (b) (c) (d)
15. (a) (b) (c) (d)
16. (a) (b) (c) (d)
17. (a) (b) (c) (d)
18. (a) (b) (c) (d)
19. (a) (b) (c) (d)
20. (a) (b) (c) (d)
21. (a) (b) (c) (d)
22. (a) (b) (c) (d)
23. (a) (b) (c) (d)
24. (a) (b) (c) (d)
25. (a) (b) (c) (d)
Total /25 marks

2. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 2
Chapter 17 Test – Buying and Selling Non-Current Assets
1. A business purchased stock valued at $10,000 (plus GST) on credit from a supplier. This
transaction would have been recorded in the:
a) General Journal
b) Cash Payments Journal
c) Sales Journal
d) Purchases Journal
2. A business purchased a new vehicle on credit from a car dealer for $22,000 including GST. This
transaction would have been recorded in the:
a) Cash Receipts Journal
b) General Journal
c) Purchases Journal
d) Cash Payments Journal
3. A business purchased fixtures and fittings from a supplier for $3,000 (plus GST) paid in cash in
full. This transaction would have been recorded in the:
a) General Journal
b) Cash Receipts Journal
c) Cash Payments Journal
d) Purchases Journal
4. A business purchased a new delivery van. The van cost $25,000 (plus GST of $2,500). The firm
paid a deposit of $5,000 and the remainder was put on account with terms of 60 days. This
transaction would have been recorded in the:
a) Purchases Journal
b) General Journal
c) Cash Payments Journal and General Journal
d) Cash Payments Journal
5. A business purchased stock on credit for the amount of $1,000 (plus GST of $100) from a
supplier named Office Suppliers Inc. on 30 day terms. This creditor would be classified as a:
a) Sundry creditor
b) Expense
c) Non-current liability
d) Trade creditor

3. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 3
6. A business purchased a new office computer for $4,400 (including GST) on credit from Narvey
Horman on 90 day terms. This supplier would be classified as a:
a) Sundry creditor
b) Trade creditor
c) Expense
d) Non-current liability
7. On 3 February a plumbing supplies business purchased a new vehicle for the amount of $12,000
(plus GST) on credit from Vinny’s Vehicles. The General Journal entry to record this transaction
would be:
a)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
3 Feb Vehicle 12000
GST Clearing 1200
Creditor – Vinny’s Vehicles 13200
b)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Feb Vehicle 12000
GST Clearing 1200
Creditor – Vinny’s Vehicles 13200
c)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
3 Feb Vehicle 12000
GST Clearing 1200
Creditors Control 13200
Creditor – Vinny’s Vehicles 13200
d) This transaction would not be recorded in the General Journal

4. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 4
8. On 28 November a business selling computers purchased computers for re-sale from a trade
creditor for the amount of $11,000 (including GST) from Danson’s Disks. The General Journal
entry to record this transaction would be:
a)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Nov Stock Control 10000
GST Clearing 1000
Creditors Control 11000
Creditor – Danson’s Disks 11000
b)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Nov Computer 10000
GST Clearing 1000
Creditors Control 11000
Creditor – Danson’s Disks 11000
c)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Nov Computer 10000
GST Clearing 1000
Creditor – Danson’s Disks 11000
d) This transaction would not be recorded in the General Journal
9. A profit recorded on the disposal of an asset is recorded in which section of the Income
Statement?
a) Revenue
b) Other Revenue
c) Other Expenses
d) Not recorded in the Income Statement

5. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 5
10. A loss recorded on the disposal of an asset is recorded in which section of the Income
Statement?
a) Other Expenses
b) Other Revenue
c) Revenue
d) Not recorded in the Income Statement
A small business owned two non-current assets which have recently been sold at the end of their
useful lives – office furniture and a vehicle.
Office furniture Vehicle
 Cost price $4,000 (excluding GST)  Cost price $25,300 (including GST)
 Useful life 3 years  Useful life 5 years
 Residual value $1,000  Residual value $3,400
 Sold for $800  Sold for $3,700
11. The office furniture:
a) Has been under-depreciated and sold for a loss
b) Has been under-depreciated and sold for a profit
c) Has been over-depreciated and sold for a loss
d) Has been over-depreciated and sold for a profit
12. The vehicle:
a) Has been under-depreciated and sold for a loss
b) Has been under-depreciated and sold for a profit
c) Has been over-depreciated and sold for a profit
d) Has been over-depreciated and sold for a loss
13. In the case of the office furniture, a profit or loss on disposal has occurred because:
a) The firm incorrectly estimated the residual value
b) The firm sold for asset for less than its residual value
c) The firm did not depreciate the asset enough during its useful life
d) All of the above
14. In the case of the vehicle, a profit or loss on disposal has occurred because:
a) The firm depreciated the asset too much during its useful life
b) The estimated the residual value correctly but used the asset more than expected
c) The firm sold the asset for less than its residual value
d) All of the above

6. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 6
The following ledger accounts were extracted from the books of Ted’s Tractors at the end of 2015:
Machinery
31 Dec Balance 24000
Accumulated Depreciation – Machinery
31 Dec Balance 16400
On 31 December the machinery was sold for $7,200 received in cash (Receipt A1).
15. In disposing of the machinery, the business has recorded a:
a) Loss of $400
b) Profit of $7,200
c) Profit of $400
d) Loss of $7,200
Knights’ Keepsakes closes its books on 31 December each year. Furniture purchased on 1 October
2015 for $4,000 plus GST had an estimated useful life of five years, after which time it was expected
to be sold for $400. Management decided to depreciate the furniture using the straight-line method.
On 31 December 2017 the owner decided to sell the furniture for $2,500 cash.
16. The entry to record the proceeds of the sale on 31 December would be:
a)
Cash Receipts Journal
Date Details
Receipt
Number
Bank $
Debtors
Control $
Cost of
Sales $
Sales $ Sundries
$
GST $
31 Dec Disposal of furniture A1 2500 2500
b)
Cash Receipts Journal
Date Details
Receipt
Number
Bank $
Debtors
Control $
Cost of
Sales $
Sales $ Sundries
$
GST $
31 Dec Disposal of furniture A1 2500 2500
c)
Cash Receipts Journal
Date Details
Receipt
Number
Bank $
Debtors
Control $
Cost of
Sales $
Sales $ Sundries
$
GST $
31 Dec Furniture A1 2500 2500

7. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 7
d)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
31 Dec Bank 2500
Disposal of furniture 2500
17. After all entries have been made to record the disposal of the furniture, the Disposal of
Furniture ledger would look like:
a)
Disposal of Furniture
31 Dec Furniture 4000 31 Dec Accum. dep’n – Furniture 1440
31 Dec Bank 2500
31 Dec Loss on disposal of furniture 60
4000 4000
b)
Disposal of Furniture
31 Dec Accum. dep’n – Furniture 1620 31 Dec Furniture 4000
31 Dec Bank 2500 31 Dec Profit on disposal of furniture 120
4120 4120
c)
Disposal of Furniture
31 Dec Furniture 4000 31 Dec Accum. dep’n – Furniture 1980
31 Dec Profit on disposal of furniture 480 31 Dec Bank 2500
4480 4480
d)
Disposal of Furniture
31 Dec Furniture 4000 31 Dec Accum. dep’n – Furniture 1620
31 Dec Profit on disposal of furniture 120 31 Dec Bank 2500
4120 4120

8. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 8
A small business purchased a vehicle on 1 March 2015 for $33,000 (including GST of $3,000). The
firm made a decision to depreciate the vehicle using the reducing balance method at 20% per
annum. The annual reporting period ends on 30 June each year. On 30 June 2017 the firm decided to
sell the vehicle for $15,500.
18. The annual depreciation expense for the years ended 30 June 2015, 2016 and 2017 will be:
2015 2016 2017
a) $2,000 $6,000 $6,000
b) $1,500 $5,700 $4,560
c) $2,000 $5,600 $4,480
d) $6,000 $4,800 $3,840
19. After all entries have been made to record the disposal of the furniture, the Disposal of
Furniture ledger would look like:
a)
Disposal of Vehicle
30 Jun Accum. dep’n – Vehicle 12080 30 Jun Vehicle 30000
30 Jun Bank 15500
30 Jun Loss on disposal of vehicle 2420
30000 30000
b)
Disposal of Vehicle
30 Jun Vehicle 30000 30 Jun Accum. dep’n – Vehicle 12080
30 Jun Bank 15500
30 Jun Loss on disposal of vehicle 2420
30000 30000
c)
Disposal of Vehicle
30 Jun Vehicle 30000 30 Jun Accum. dep’n – Vehicle 14640
30 Jun Profit on disposal of vehicle 140 30 Jun Bank 15500
30140 30140
d)
Disposal of Vehicle
30 Jun Vehicle 30000 30 Jun Accum. dep’n – Vehicle 11760
30 Jun Bank 15500
30 Jun Profit on disposal of vehicle 2740
30000 30000

9. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 9
The following accounts were extracted from the General Ledger of a small business selling sporting
goods as at 28 February 2015.
Fittings
28 Feb Balance 14000
Accumulated Depreciation – Fittings
28 Feb Balance 6000
On 28 February 2015 the fittings were traded in on a new model. The trade-in allowance given by
the supplier, Fred’s Fittings, for the old fittings was $7,200. This was offset against the cost of the
new fittings purchased which were valued at $17,600 (plus GST).
20. The entry to record the transfer of the historical cost of the fittings in the General Journal on 28
February 2015 would be:
a)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Feb Disposal of fittings 6000
Fittings 6000
b)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Feb Disposal of fittings 14000
Fittings 14000
c)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Feb Fittings 14000
Disposal of fittings 14000
d)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
28 Feb Disposal of fittings 8000
Fittings 8000

10. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 10
21. On 1 March 2015 the account for Fred’s Fittings in the General Ledger will look like:
a)
Creditors Control
28 Feb Disposal of fittings 7200 28 Feb Fittings/GST Clearing 19360
28 Feb Balance 12160
19360 19360
1 Mar Balance 12160
b)
Creditor – Fred’s Fittings
28 Feb Disposal of fittings 7200 28 Feb Fittings/GST Clearing 19360
28 Feb Balance 12160
19360 19360
1 Mar Balance 12160
c)
Creditor – Fred’s Fittings
28 Feb Disposal of fittings 7200 28 Feb Fittings/GST Clearing 17600
28 Feb Balance 10400
17600 17600
1 Mar Balance 10400
d)
Creditor – Fred’s Fittings
28 Feb Disposal of fittings 7200 28 Feb Fittings/GST Clearing 19360
28 Feb Balance 12160
19360 19360
28 Feb Balance 12160

11. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 11
Rhea’s Really Good Gifts closes its reporting period on 31 March every year. On 30 November 2015
the business bought a delivery vehicle for $30,000 plus GST of $3,000. The asset was depreciated
using the reducing balance method at a rate of 25% per annum. However, on 30 September 2017,
the owner decided to trade-in the vehicle for a newer model valued at $35,000 (plus $3,500 GST).
The balance was put on credit terms of 60 days. The trade-in allowance given by the dealer, Leon’s
Autos, was $19,000.
22. The General Journal entry to record the trade-in of the old vehicle would be:
a)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Sep Disposal of Vehicle 19000
Creditor – Leon’s Autos 19000
b)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Sep Creditor – Leon’s Autos 19000
Vehicle 19000
c)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Sep Creditor – Leon’s Autos 19000
Disposal of Vehicle 19000
d)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Sep Creditor’s Control 19000
Disposal of Vehicle 19000

12. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 12
23. On 30 September 2017, the Disposal of Vehicle account will appear as follows:
a)
Disposal of Vehicle
30 Sep Vehicle 30000 30 Sep Accumulated Dep’n-Vehicle 11953
30 Sep Loss on disposal of vehicle 953 30 Sep Creditor – Leon’s Autos 19000
30953 30953
b)
Disposal of Vehicle
30 Sep Vehicle 30000 30 Sep Accumulated Dep’n-Vehicle 11328
30 Sep Profit on disposal of vehicle 328 30 Sep Creditor – Leon’s Autos 19000
30328 30328
c)
Disposal of Vehicle
30 Sep Vehicle 30000 30 Sep Accumulated Dep’n-Vehicle 11953
30 Sep Profit on disposal of vehicle 953 30 Sep Creditor – Leon’s Autos 19000
30953 30953
d)
Disposal of Vehicle
30 Sep Vehicle 30000 30 Sep Accumulated Dep’n-Vehicle 11328
30 Sep Loss on disposal of vehicle 328 30 Sep Creditor – Leon’s Autos 19000
30328 30328

13. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 13
William’s Whitegoods closes its books on 31 December every year. On 1 March 2015 the business
purchased office furniture for $11,000 (including GST of $1,000). The office furniture is expected to
be used for five years, after which time it will be sold for $1,000. The owner has decided to
depreciate the asset using the straight-line method.
On 30 November 2017 the firm decided to replace the office furniture and received the following
document:
Funtastic Furniture Tax Invoice No. 118
17 Collins Street
Melbourne, VIC 3000 Date: 30/11/2017
ACCOUNT:
William’s Whitegoods
214 High Street
Kew, VIC 3101
Qty Item Cost GST Total
1 Office furniture $12,000 $1,200 $13,200
Delivery fee $500 $50 $550
Subtotal $13,750
Less trade-in allowance $4,350
Amount owing $9,400
CREDIT TERMS – STRICTLY 60 DAYS
24. When the office furniture is disposed of on 30 November 2017, the General Journal entry to
record the transfer of the accumulated depreciation on the old office furniture will be:
a)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Accumulated dep’n–Office furniture 4800
Disposal of office furniture 4800
b)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Accumulated dep’n–Office furniture 4950
Disposal of office furniture 4950

14. VCE ACCOUNTING
UNIT 4 – CONTROL AND ANALYSIS OF BUSINESS PERFORMANCE
CHAPTER 17 – BUYING AND SELLING NON-CURRENT ASSETS
© Michael Allison, Trinity Grammar School.
Author’s permission required for external use
Page | 14
c)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Accumulated dep’n–Office furniture 5100
Disposal of office furniture 5100
d)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Accumulated dep’n–Office furniture 5400
Disposal of office furniture 5400
25. The journal entry required on 30 November 2017 to record the purchase of the new office
furniture will be:
a)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Office furniture 12000
GST Clearing 1200
Creditor – Funtastic Furniture 13200
b)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Office furniture 12500
GST Clearing 1250
Creditors Control 13750
Creditor – Funtastic Furniture 13750
c)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Office furniture 9400
Creditor – Funtastic Furniture 9400
d)
General Journal
Date Particulars General Ledger Subsidiary Ledger
Debit $ Credit $ Debit $ Credit $
30 Nov Office furniture 12500
GST Clearing 1250
Creditor – Funtastic Furniture 13750