Accounting Online Program Certification Practice Test

What is the net profit of Ben plc after accounting for depreciation on the new machine for the year ended 31 December 20X8?

1. £50,500

2. £49,530

3. £56,780

4. £57,000

The correct answer is: £49,530

To determine the net profit of Ben plc after accounting for depreciation on the new machine, it is crucial to consider how depreciation affects net income. Depreciation is an accounting method that allocates the cost of a tangible asset over its useful life. This expense reduces the taxable income, thereby impacting the net profit calculation. In this case, if the net profit after recognizing depreciation amounts to £49,530, it suggests that all necessary expenses, including operational costs and the depreciation of the new machine, have been considered in the profit calculation. The process typically involves starting with total revenue and deducting all expenses, including operating expenses and depreciation, to arrive at the net profit figure. Since other options present values that do not align with the calculations made regarding revenues and expenses, the confirmed amount of £49,530 is positioned as the most accurate reflection of Ben plc's financial performance after accounting for the required depreciation. This confirms its importance in understanding net profit and accurate financial reporting.