JAMB Accounts Principles of Accounts 2010 Paper

Concept:When a fixed asset is used for more than one purpose, its depreciation must be shared between the relevant accounts.Explanation:The motor vehicle is used for both manufacturing and administration.So its depreciation cannot be charged to only one account.The part used for manufacturing is a production cost.This portion is debited to the manufacturing account.The part used for administration is an administrative expense.This portion is debited to the profit and loss account.Therefore, the total depreciation is charged to the debit side of both the manufacturing account and the profit and loss account.Answer:Option A: debit side of manufacturing and profit and loss account.