Depreciation of non-current assets is due to :
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- Which of the following statements about depreciation is not true? A. Depreciation does not mirror the actual loss of value over time. B. Depreciation is the allocation of the asset’s cost to expense over the expected years of use. C. If the fair value of the asset increases, depreciation is reversed to reflect the change in value. D. U.S. GAAP requires depreciation methods to be systematic and rational.What element must be present when determining if an asset is a depreciating asset? a. An asset that holds its value for a period of time or increases in value for a period. b. An asset that has a limited effective life. c. A fixture that completely loses its value. d. An asset that cannot reasonably be expected to decline in value over time.Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.
- Functional factors of depreciation include a. Obsolescence b. Wear and tear c. Usage of the asset d. Passage of timeThe most appropriate reason for an increase in depreciation expense is that a. Depreciation for prior periods was overstated. b. Major repairs were not recorded. c. A depreciable asset was impaired. d. Retained earnings have been appropriated for a possible loss on retirement. e. Based on a re-evaluation, estimated salvage values have been lowered.It is the gradual diminution of the useful value of tangible property resulting from wear and tear and normal obsolescence. It is also applied to the amortization of intangible assets the use of which in the trade or business is definitely limited in duration. Group of answer choices Depreciation Depletion Obsolescence Bad debts
- The book value of a depreciable asset is A. The original cost of the asset. B. The original cost of the asset less its accumulated depreciation. C. The original cost of the asset less its salvage value. D. The accumulated depreciation on the asset. E. None of these.1)If an asset value recovers after an impairment loss has been recognized for the asset, what amount of restoration of that loss is recognized?a.The difference between the original cost and the new recoverable amount.b.The difference between the original loss and the new recoverable amount.c.The difference between the carrying amount and the new recoverable amount.d.None of the recovered value is recognized.2) Occasionally, events occur that change an asset's value after purchase. Which of the following is true regarding these changes in value?a.Increases in asset value are recognized.b.Reductions in asset value are recognized.c.Both decreases and increases are recognized.d.Neither decreases nor increases are recognized.4. The most appropriate definition of depreciation is: A. A means of determining the decrease in the market value of an asset over time B. A means of allocating the cost of an asset over a number of accounting periods C. A means of setting funds aside for the replacement of the asset D. A means of estimating the current value of the asset
- Depreciation is the decline in value of an asset over time due to normal wear and tear and to obsolescence. True FalseWhich of the following represents an event that is less routine when accounting for long-term assets? A. recording an asset purchase B. recording depreciation on an asset C. recording accumulated depreciation for an asset or asset category D. changing the estimated useful life of an assetThe loss in value from all causes within a property except those due to physical deterioration is known as which of the following? A. functional obsolescence B. obsolescence C. true obsolescence D. deterioration