reason that depreciation is a source of cash inflow is because

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Under the impairment of assets, value-in-use is *   a. The undiscounted present value of future cash flows arising from the continuing use of the asset and from its disposal. b. The discounted present value of future cash flows arising from the continuing use of the asset and from its disposal. c. The higher of an asset's fair value less cost to sell and its market value d. The amount at which the asset is recognized in the statement of financial position

Using tax depreciation for tax purposes and straight-line depreciation for financial reporting, do deferred tax liabilities lead to true future cash flow?

Which of the following are not “non-cash” expenses? a) Depreciation expense b) Prepaid expense c) Depletion expense d) Amortization expense

2

When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds not needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be?                                                            A) multiplied by an appropriate interest rate to determine the amount of interest to be capitalized.                                                                                     B) offset against interest cost incurred during construction.                               C) recognized as revenue of the period.                                                             D) used to reduce the cost of assets being constructed.

The deductibility of interest on borrowed money is limited to the extent that it was invested to generate an income that is not tax exempt.   Question 10 options:   True   False

THe depreciation recapture provisions are designed to prevent taxpayers from converting capial gains into ordinary income.

Question 16 The undepreciated capital cost (UCcC) is equal to O a, the book value of an asset for the purpose of taxation under the CCA system. O b, the market value of an asset. O , the salvage value of an asset. O d, the scrap value of an asset.