FREE ACCA BOOKS DOWNLOAD -  P5 REVISION & MOCK QUESTION & ANSWERS 2017-2018

The correct answer is B.
B is the correct answer because late payment interest is a personal
liability of the owner of the business rather than the business itself, and is
disallowable.
The legal fees in respect of the new shop are capital expenditure and
also disallowed.
The write off of trade debts and subscribing to a trade related magazine
are both allowable for tax purposes.

The correct answer is C.
Expenditure which would be allowable once the business has
commenced, is allowable if incurred in the 7 years before trading
commences. The rent and advertising are allowable but the suit is a
private expense.

Capital allowances: Plant
and machinery
Chapter learning objectives

Upon completion of this chapter you will be able to:
• define plant and machinery for capital allowance purposes
• compute the annual investment allowance (AIA) available for
certain types of expenditure
• compute first year allowances (FYAs) available
• compute writing down allowances (WDAs) for an accounting
period
• compute balancing allowances and balancing charges
• compute capital allowances for motor cars
• recognise the impact of private use of an asset on capital
allowances
• explain the treatment of assets included in the special rate pool
• recognise when the small pool WDA is available
• explain the treatment of short life assets.