ACC CH 7 learnsmart Practise Questions 2024
The allocation of the cost of tangible asset over its service life is referred to as ______ ** Answ** depreciation
the purchase price and all costs to bring an asset to its desired condition and location for use should be _____
-accrued
-ex...
The allocation of the cost of tangible asset over its service life is referred to as ______
** Answ** depreciation
the purchase price and all costs to bring an asset to its desired condition and location
for use should be _____
-accrued
-expensed
-capitalized ** Answ** capitalize (record an expenditure as an asset)
The original cost of an asset minus accumulated depreciation is
-residual value
-goodwill
-book value
-disposal value ** Answ** book value
The service life or useful life of an asset is
-the estimated use that the company expected to obtain from the asset before disposing
of it
-determined by MACRS tables
-the time period from the purchase of the asset until it becomes impaired ** Answ**
the estimated use that the company expected to obtain from the asset before disposing
of it
(Sleect all that apply) The types of expenditures that can occur subsequent to an asset's
acquisition are
-repairs and maintenece
-goodwill
-additions
-improvements ** Answ** -repairs and maintence -additions -improvements -
litigation costs
Term used to describe the amount the company expects to receive for an asset at the
end of its service life is
-residual value
-impairment value
-historical cost
-lower of cost or market value ** Answ** residual value
depletion ** Answ** allocation of the cost of natural resources
Which are commonly used depreciation methods?
-activity based
, -stright line
-declining -balance
-value-based ** Answ** stright line
declining balance
activity based
For accounting purposes, depreciation is ** Answ** an allocation of a cost of an
asset
The original cost of the asset less the accumulated depreciation is the _______
_______ of the asset ** Answ** book value
The depreciation method that allocated an equal amount of the depreciable base to
each year of the asset's service life is the ** Answ** straight line ( asset used evenly,
easiest method,)
-Depreciation method: ** Answ** the pattern in each the assets depreciable cost
(org cost-residual value) is allocated over time
Declining balance ** Answ** -accelerated method (more deprecation expense is
taken in earlier years)
-used in tax purposes
Activity based method ** Answ** calculates depreciation based on the use/activity of
the asset ( miles)
-used for cost of natural resources
depreciable cost equation ** Answ** Depreciable cost = asset cost - est. residual
value
Straight-line method equation ** Answ** asset's cost-estimated residual value
depreciable cost represents ** Answ** total depreciation to be taken over the asset's
useful life
Both declining-balance and straight-line will result in the same total depreciation over
the asset's service life ** Answ** true : no matter what allocation method is used,
total depreciation over the asset's service life will be equal to the depreciable cost (asset
cost - residual value)
Straight, declining balance, activity-based refer to methods commonly used to ______
property ** Answ** depreciate
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