Question 2 Depreciation is the process of valuing an asset at its fair value. increasing the value of an asset over its useful life in a rational and systematic ma allocating the cost of an asset to expense over its useful life in a rational and syste writing down an asset to its real value each accounting period

Which depreciation method would result in the same depreciation expense amount regardless of the partial period cor Select one: a. Sum-of-the-years'-digits b. Declining-balance c. Units-of-production d. Straight-line

Which of the following is true? O The book value at the end of an asset's useful life will be the same under all the depreciation methods allowed under generally accepted accounting principles. The annual depreciation expense will usually differ under the various depreciation methods. The total depreciation in the accumulated depreciation account will be the same at the end of the asset's useful life under all the methods allowed under generally accepted accounting principles. O All are true.

TRUE OR FALSE The term used to describe the mechanical process of allocating the cost of an intangible asset to expense over the shorter of the legal life or estimated useful life is called amortization.

How would accumulated depreciation be classified on the balance sheet? current asset fixed asset current liability O long term liability

Question 29 Replacement cost of an asset is related to:   A. Market value   B. Current costs   C. Capabilities of the old asset   D. Opportunity costs

Which depreciation method ignores residual value when computing the depreciable base of an asset? a. sum-of-the-year's-digits b. double-declining-balance c. composite depreciation d. group depreciation

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

Of the following, what information is required to calculate depreciation allowances under MACRSGDS? I. Useful life II. First cost. III. Salvage value. IV. Property class a. II and IV only. b. II, III, and IV only. c. I, II, and IV only. d. I, II, III, and IV.

What is the effective life of an asset?   a. The total period of ownership of the asset, including when it is not installed and ready for use..   b. The period prior to the asset being abandoned or scrapped.   c. The period that the asset can be used for income-producing purposes.   d. All of the above.