It is a method that is calculated by subtracting the salvage value of the asset from the purchase prices, and then … B. Ultrasonic vibrations have a frequency lower than the range for normal hearing. B) Depreciation allocates the cost of a fixed asset over its estimated life. Computer equipment for instance has better functionality in its early years. Which of the following statements is true regarding the Accumulated Depreciation account? 2. Townson’s fixed asset turnover ratio has decreased between Year 1 and Year 2. Challenge How many of the following statements regarding goodwill are true? a. Accelerated depreciation changes the total amount of depreciation taken over the life of the asset Which of the following statements are true regarding straight line depreciation? b. Depreciation is the process of allocating the costs of long-term assets over their expected useful life. Sales commission is a product cost and depreciation on factory equipment is a product cost. Which of the following is true regarding depreciation recapture? Depreciation is a process by which a business sets aside cash to replace assets as needed. Which of the following is not a section 1245 asset if held for more than one year? All of the following statements are true regarding the company’s fixed asset turnover ratio except. Which of the following is true regarding the concept of flexibility?a. Impairment is an accounting principle that describes a reduction in the value of a company's asse t. Impairment is a significant and prolonged decline in value. Businesses with a net loss in a given tax year qualify to carry-forward the Bonus Depreciation to a future year C. Bonus Depreciation only covers new equipment D. Which of the following statements is TRUE regarding depreciation expense? D. Only applies to ordinary assets. Accelerated depreciation will decrease NPV. C) Depreciation expense does not measure changes in market value. Which of the following statements is true regarding depreciation? a) Accelerated depreciation will increase the NPV. Which of the following is true regarding depreciation recapture? Changes the character of a loss. Changes the character of a gain. It generates a before-tax cash outflow. Sales commission is a product cost and factory rent is a period cost. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: … Using reducing balance method to depreciate computer equipment would ensure that higher depreciation is charged in the earlier years of its operation. d. Accumulated depreciation is the portion of an asset's cost that has already been recorded as an expense. Below is the solution for the Question Which of the following statements are true regarding straight line depreciation? A. Depreciation recognizes normal wear and tear as the asset is used. A. A. 3. Depreciation Formula for the Straight Line Method: Depreciation Expense = (Cost – Salvage value) / Useful life . O Changes the character of a gain. Which of the following is true regarding the alternative ways to apply the income approach to accounting of resources acquired through government grants? The depreciation method selected should reflect the expected pattern of consumption of the future economic benefits embodied in the asset. All of the above are true.e. In straight-line depreciation, the expense amount is the same every year over the useful life of the asset. D. Infrasonic vibrations are used in sonar equipment and to detect flaws in steel castings. A. Depreciation expense reflects the decrease in market value each year. It is the ability to change production rates with little penalty in time cost or customer value.b. D) Depreciation is an allocation not a valuation method. Garcia sells the equipment for cash. a.The use of a declining balance method of depreciation will produce lower depreciation charges in the early years of an asset's life compared to the straight-line depreciation method. Factory maintenance is a product cost and sales commission is a period cost. Here’s the answer for Which of the following statements are true regarding straight line depreciation? Which of the following statements is true? The auditors' approach to the audit of property, plant and equipment largely results from the fact that relatively few transactions occur. Which of the following statements is true of vibrations? O Changes the amount of a gain. a. 19. 12. No matter when equipment is purchased during the month, it is considered to have been purchased mid-month for MACRS depreciation purposes. b. It may involve modular movable even cheap equipment.d. None of the above is true. Depreciation is the process of determining the value of accounts receivable which will be collected in the current period. None of the choices are correct. b. A)expenses will be higher and net income lower if the grant is recorded as deferred revenue. If you have difficulty answering the following questions, learn more about this topic by reading our Depreciation (Explanation). Consider a piece of equipment that costs $25,000 with an estimated useful life of 8 years and a $0 salvage value. O Only applies to ordinary assets. B. The balance in the Accumulated Depreciation account represents the total amount recorded as Depreciation Expense from the time the asset was acquired. D. It generates a before-tax cash inflow. Factory wages is a product cost and direct material is a period cost. LO 11.5Garcia Co. owns equipment that costs $150,000, with accumulated depreciation of $65,000. E. None of the above. c. Depreciation is an allocation not a valuation method. Depreciation is only an estimate of the decline in value of an asset. D. Management must know the exact life of an asset in order to calculate an acceptable depreciation expense. depreciated separately.. Solution for Which of the following statements is true regarding depreciation methods? Depreciation allows businesses of any kind that purchase equipment or infrastructure, such as a building or warehouse, to spread out the loss of value of the life of the asset rather than having to take the cost as an expense all at once for tax purposes. The Accumlated Depreciation account is a cash fund to be used to replace long-lived assets. Which of the following is not true regarding depreciation? Which of the following is true about the MACRS depreciation system? Which of the following statements is true regarding depreciation methods of property, plant and equipment? Depreciation is a process by which a business sets aside cash to replace assets as needed. 53. 1. A. Which of the following statements is true with regard to depreciation expense? A. Example. All of these choices are correct. Bonus Depreciation is useful to very large businesses spending more than the Section 179 spending limit B. A major control procedure related to plant and equipment is a budget for depreciation. B. a. For fill-in-the-blank questions press or click on the blank space provided. Neither ultrasonic nor infrasonic vibrations can be heard by humans. Multiple Choice. Depreciation is a process of valuation. 3 Multiple Choice nts mo 00:32:35 Changes the character of a loss. A) Depreciation expense reflects the decrease in market value each year. d. Depreciation expense does not measure changes in market value. Which of the following is an incorrect statement regarding Bonus Depreciation? Depreciation is a process of valuation. Which of the following statements is true? Accelerated depreciation will decrease IRR. It generates an after-tax cash outflow. A company should use the depreciation method that best matches expense recognition with the use of the asset. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. A. b) Accelerated depreciation will increase the Payback. True False 3. True False 2. C. Depreciation is only recorded at the end of a year and never over a shorter time period. Computer equipment also becomes obsolete in a span of few years due to technological developments. a.The use of a declining balance method of depreciation will produce… It is a method that is calculated by subtracting the salvage value of the asset from the purchase prices, and then dividing this number by the estimated useful life of asset. E. It will always cause the … Which of the following statements is true regarding depreciation methods? C. Changes the amount of a gain. B)Recapture is generally not required upon the gift of § 1250 property. Which of the following is statements is false regarding depreciation recapture under § 1250? A)Depreciation recapture that existed at the death of the taxpayer carries over to the beneficiaries. Depreciation allocates the cost of a fixed asset over its estimated life. The following statement is true regarding depreciation: Accelerated depreciation will increase the NPV. C. It generates an after-tax cash inflow. Straight-line depreciation is the only acceptable method. Which of the following statements is most likely correct regarding the depreciation of property, plant and equipment under IFRS and U.S. GAAP? Which of the following is not one of the factors used to determine depreciation expense. Which is NOT true regarding depreciation? Company X is going to retire equipment that is fully depreciated with Thornton Industries purchased a machine for $45,000 and is Accelerated depreciation will increase the Payback. Depreciation is the systematic allocation of the cost or depreciable amount of an asset over its useful life. Restaurants depreciate the cost of the equipment over all the years of its useful life. BELOW IS THE CORRECT ANSWER: C. Unlike U.S. GAAP, under IFRS each component of an asset must be. Property, Plant, and Equipment: Depreciation and Depletion True / False Questions 1. Depreciation is an exact calculation of the decline in value of an asset. B)expenses will be higher and net income lower if the grant is accounted for as an adjustment to the asset. 6.Which of the following statements about property, plant, and equipment and depreciation is true? C. The frequency of infrasonic vibrations is much too high to be heard by humans. Commercial real estate buildings are depreciated over 39 years using accelerated depreciation… It can be accomplished with sophisticated electronic equipment.c. A. B. B. Depreciation is the process of recognizing revenues earned within the current accounting period. a. 4. 1. it provides funds for the replacement of the asset through tax savings over the assets life. c. Accumulated depreciation represents a growing fund of cash. Regarding goodwill are true line method: depreciation expense Accelerated depreciation which of the following is true regarding depreciation of equipment increase the NPV as an expense 11.5Garcia owns... More about this topic by reading our depreciation ( Explanation ) the balance in the asset ) / useful of... Equipment for instance has better functionality in its early years a cash fund to be heard by.... The MACRS depreciation purposes will produce… which of the factors used to replace as... The concept of flexibility? a Accumulated depreciation represents a growing fund of cash the decline in value an. The audit of property, plant, and equipment selected should reflect the expected of. 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Accumulated depreciation is a period cost decreased between year 1 and year 2 to assets!
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