True or false ________ 10. Depreciation is charged on all company’s assets. ________ 11. Depreciation is the part of the cost of the fixed asset consumed during the period of use by the firm. ________ 12. The cost of repairs is included in the calculation of depreciation of a fixed asset
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- True or false ________ 13. The proceeds from the sale of a fixed assets would be credited to sales accounts ________ 14, The straight line method is the allocation of depreciation where the amount of depreciation is reduced form year to year ________ 15. Replacement method is a method of calculating depreciation.LO1 Depreciable cost is the difference between the original cost of the asset and its accumulated depreciation.12. How is the matching principle related to the recording of depreciation on tangible operational assets? A. The matching principle requires a company to use the same depreciation. B. Once a particular depreciation method is adopted for a particular asset, the owner must continue to use the same method. C. The accountant who calculates the depreciation may assume that the company will continue in business as long as the estimated useful life of the asset. D. A portion of the cost of the asset should be allocated as an expense for the periods in which the asset helps the business to earn revenue.
- Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable asset13. Depreciation expense for a period is the a. original cost of an asset - accumulated depreciation. b. book value of the asset + useful life. c. portion of an asset's cost that expired during the period. d. market value of the asset + useful life.What is the 'carrying amount of a depreciating non-current asset? O A. The cost (or fair value) of the asset less the accumulated depreciation on that asset O B. The current market value of the asset C. The cost (or fair value) of the asset less the current year's depreciation O D. The cost (or fair value) of the asset
- Accounting Which statement is false? Accounting for asset retirement obligations (ARO) apply to both Full Cost and Successful Efforts companies. Asset retirement costs (ARC) are capitalized as part of a related long- lived asset. ARC is subject to amortization. ARC is allocated to expense over the useful life of the asset. All of the above are true.1. Please explain the concept of depreciation in your own words and discuss why it is important. Wouldn't it make more sense for companies to fully expense fixed assets in the year of purchase rather than depreciating them over time? 2. 1. What is the definition of a fixed asset and which expenditures can be added to the capitalized cost of a fixed asset? 3. 2. Please define the term "Net book value."One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant & equipment subsequent to initial recognition. Read IAS 16 and answer the following questions. Provide a list of the references you have used to search this topic. 1) What are the accounting models accepted under IFRS for the measurement of property, plant & equipment subsequent to initial recognition? 2) How often should the company revalue its property, plant & equipment under the revaluation model? 3) How should the revaluation gains and losses be accounted for and reported in the financial statements? 4) How should any claim for compensation from third parties for impairment be accounted for? 5) How should the recoverability of the carrying amount of property, plant & equipment be accounted for?
- 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 assetTrue or false ________4. Depreciation is regarded as a non-cash expense. ________ 5. Depreciation is charged on current assets. ________ 6. The main cause of depreciation is wear and tear caused by its usage.As generally used in accounting, what is depreciation? a. It is an accounting process which systematically allocates long-lived assets cost to accounting periodsb. It applies only to long-term lived intangible assetsc. It is a process of asset valuationd. It is used to indicate a decline in market value of a long-term lived asset
