The period of time during which interest must be capitalized ends when The asset is abandoned, sold or fully depreciated The activities that are necessary to get the asset for its intended use have begun No further interest cost is being incurred The asset is substantially complete and ready for its intended use.

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 manner allocating the cost of an asset to expense over its useful life in a rational and systematic manner. writing down an asset to its real value each accounting period

The purpose of the depreciation adjustment is to:   -spread the cost invested in an asset over its useful life. -show the current market value of the asset. -set up a reserve fund for purchasing a new asset. -expense the full amount of the asset in the year purchased.

With regards to depreciation, which of the following is not true? O Straight Line depreciation includes initial cost and salvage value in the depreciation calculation. In straight line depreciation, the depreciation life (n) is set based on the MACRS property class. MACRS Depreciation method is the only method allowed for accounting and tax purposes. In MACRS depreciation, the salvage value is assumed to be zero. In straight line depreciation, the asset is depreciated down to a book value equal to the salvage value.