An impairment loss is recorded when capital asset's 1. net book value is higher than the amount it could likely be sold for 2. market value is higher than its accumulated amortization 3. market value is higher than its net book value 4. net book value is higher than its accumulated amortization

An impairment loss is recorded when capital asset's 1. net book value is higher than the amount it could likely be sold for 2. market value is higher than its accumulated amortization 3. market value is higher than its net book value 4. net book value is higher than its accumulated amortization

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...

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Question

(Multiple Choice Question)

An impairment loss is recorded when capital asset's

1. net book value is higher than the amount it could likely be sold for

2. market value is higher than its accumulated amortization

3. market value is higher than its net book value

4. net book value is higher than its accumulated amortization

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When market value of an asset is higher than book value, depreciation is not charged. A True B False
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For financial accounting purposes, depreciation expense represents the decreasein an asset's fair market value. Select one: True False The total amount of depreciation taken over the life of a depreciable asset should be less if the double-declining balance depreciation method is used than if the straight-line method is used. Select one: True False
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The book value of an asset is equal to the asset's cost less accumulated depreciation. asset's fair value less its historical cost. blue book value relied on by secondary markets. replacement cost of the asset.
Which of the following situations indicates that an asset is impaired?a. The net book value of the asset is less than the asset’s estimated future cash flows.b. The net book value of the asset is more than the asset’s estimated future cash flows.c. The fair market value of the asset is less than the asset’s net book value.d. The fair market value of the asset is more than the asset’s net book value.
LO1 Depreciable cost is the difference between the original cost of the asset and its accumulated depreciation.