Accounting JAMB

The depreciation on a motor vehicle that is being used for manufacturing and administration is charged to the?

A. debit side of manufacturing and profit and loss account
B. debit side of profit and loss account only
C. credit side of profit and loss account only
D. debit side of manufacturing and balance sheet

Correct Answer:

Option B – debit side of profit and loss account only

Explanation

The profit and loss account is used by manufacturing concerns to ascertain the cost of production at various stages. A motor vehicle used by a manufacturing company would be depreciated to the debit side of profit and loss account

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