Accounting Question for exam

Youngbusiness

I have a university exam in financial accounting soon enough but term is over. Need help because the two different examples the lecturer gave us are quite different

For continuing and discontinuing operations, where lets say warehouse b closes.

Example 1 is
Continuing operations
Revenue
Cost of sales (Purchases+Open stock-closing stock +Dep. on continuing ops)

Example 2 is
Continuing operations
Revenue
Cost of sales (Purchases+Open stock-closing stock +NO Dep. on continuing ops)

Any help clearing up this matter would be greatly appreciated!
Thanks

Didymus

I'm studying ACCA and to the best of my knowledge the legislation doesn't state where abouts in the P&L you put the depreciation charge. Unless otherwise stated, include it in the cost of sales figure as per your example 1, but you are not wrong to put it under general admin expenses as per your example 2.

The priority would be that wherever you put it, it is put it the same place each year. Changing it from one to the other would be a change in accounting policy presentation as per FRS 18.

Hope this helps.

Fidget

Usually the question tells you where to charge the deprectiation to. I've done some past papers where the depreciation is to be apportioned between CoS, Distribution Expenses, and Admin Expenses, in a stated % proportion, but mostly they say it's all charged to CoS. In the absence of anything in the question telling what to do with it, I would charge it to CoS.