Which of the following best describes depreciation? A It is a means of spreading the payment for the asset over its total estimated life B It represents the decline in the market value of the asset C It is a means of spreading the cost of an asset over its estimated useful life D It is a way of estimating the cash needed to replace the asset in the future

A loss on impairment on a limited life intangible asset is the difference between the asset’s Select one: carrying value and its undiscounted expected future net cash flows. fair value and its net realizable value. fair value and its discounted expected future net cash flows. carrying value and its fair value.

Which of the following is not true in regard to selling fixed assets? a.If the selling price is more than the book value, a gain is recorded. b.The cash receipt is recorded. c.The journal entry is similar to discarding fixed assets. d.Accumulated Depreciation will be credited.

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.

A gain or loss on the sale of a plant asset is determined           by comparing the:       A. Asset's original cost with the sales proceeds       B.  Asset's book value with the sales proceeds       C. Asset's original cost with the asset's book value.       D. Initial estimate of the asset's salvage value with the sales proceeds.       E. None of these.

Which of the following statements is true when the straight-line method is used to compute amortization? Multiple Chaice Expense recognizes declines as the asset wears out Accumulated amortization is a constant amount during the asset's estimated useful life. Amortization expense per period is the amortizable cost divided by the number of periods in the asset's useful life. The carrying value of an asset is a constant amount during the asset's useful life. None of the other alternatives are correct

Place T or F in front of each of the following statements. 1. The straight-line method of depreciation is based on the assumption that depreciation expense can be regarded as a constant function of time. 2. Plant assets should be written down (below cost) when their market value has declined temporarily. 3. The accounting profession has developed specifically recommended procedures for recording appraisal increases with respect to plant assets. 4. An asset's cost minus its accumulated depreciation equals its book value. 5. The sum-of-the-years'-digits method of depreciation ignores salvage value in the computation of an asset's depreciable base. 6. When using the double-declining balance method of determining depreciation, a declining percentage is applied to a constant book value. 7. The book value of plant assets initially declines more rapidly under decreasing-charge methods than under the straight-line method. 8. Accounting depreciation is computed by…

3) Which of the following best describes a depreciation base?7) The acquisition cost of an asset relative to its fair value O The estimated market value of an asset at the end of its useful life O The historical cost of an asset less the depreciation recognized to date O The amount that should be expensed over an asset's useful life

Depreciation is the allocation of the cost of a plant asset over its useful life in a rational and systematic manner. The asset being depreciated remains at historical cost and the accumulated depreciation account serves as a contra account to lower the asset balance on the books. Question: Explain why this lowered value is, or is not, the market value of the asset in any given accounting period. Support your answer with examples explaining your choice.

Should depreciation continue to be recorded on a buildingwhen ample evidence exists that the current market value isgreater than original cost and that the rising trend of marketvalues is continuing? Explain.