hich of the following statement best describes depreciation? a. It is a means of spreading the payment for non-current assets over a period of years b. It is a decline in the market value of assets c. It is a means of spreading the cost of non-current assets over the estimated useful life d. It is a means of estimating the amount of money needed to replace the asse

hich of the following statement best describes depreciation? a. It is a means of spreading the payment for non-current assets over a period of years b. It is a decline in the market value of assets c. It is a means of spreading the cost of non-current assets over the estimated useful life d. It is a means of estimating the amount of money needed to replace the asse

Name: Which of the following statement best describes depreciation? a. It is
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Description: Which of the following statement best describes depreciation? a. It is a means of spreading the payment for non-current assets over a period of years b. It is a decline in the market value of assets c. It is a means of spreading the cost of non-curre

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 1.3CIC

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Which of the following best describes depreciation?A It is a means of spreading the payment for the asset over its total estimated lifeB It represents the decline in the market value of the assetC It is a means of spreading the cost of an asset over its estimated useful lifeD It is a way of estimating the cash needed to replace the asset in the future
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
Why is depreciation expense recognized? Select one: a. To provide a better estimate of the market value of the depreciated assets. b. So that the balance sheet value of plant assets will more accurately reflect the replacement cost of the assets. c. To ensure that cash will be available at the end of the assets' useful life in order to replace it. d. To match the cost of the asset against the revenue using a reasonable allocation. method. Save AnswersNext
Evaluate the consequences of depreciation charged on the historical cost of the assets. I) depreciation is calculated on the original cost of fixed assets, the resulting figure under accumulated depreciation will be only the amount equivalent to the original costof the asset. II) If depreciation is calculated as per historical accounting, sufficient funds will not be available for assets' replacement when its life is over. III) the replacement cost of the asset will be more than the original cost of inflation so that replacement provisions made by the way of depreciation charge on the original cost will be insufficient. IV) the conventional system of accounts based on historical cost does not give a true and fair view of the business enterprise. a. Statements I, Il and IV b. Statements I, II II and IV C. Statements I, Il and II d. Statements II, IIl and IV
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Which of the following best describes depreciation? A.ccounts for the market value of a physical asset B.Part of the cost of a physical asset allocated as an expense to each time period in which the asset is used. C.Shows the increase in value of a physical asset over the asset’s useful life D.Shows the drop in value of an asset when the asset is first used by an entity
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Depreciation: A. Measures the decline in market value of an asset.B. Measures physical deterioration of an asset.C. Is the process of allocating to expense the cost of an item of property, plant and equipment.D. Is an outflow of cash from the use of an item of property, plant and equipment.E. Is applied to land.
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