1. Distinguish among depreciation, depletion and amortization. 2. Identify the factors that are relevant in determining the annual depreciation charge and explain whether these factors are determined objectively or whether they are based on judgment. 3. For what reasons are plant assets retired? Define inadequacy, supersession, and obsolescence. 4. What are the major factors considered in determining what depreciation method use? 5. List the similarities and the differences in accounting treatments of depreciation and cost depletion.
1. Distinguish among depreciation, depletion and amortization. 2. Identify the factors that are relevant in determining the annual depreciation charge and explain whether these factors are determined objectively or whether they are based on judgment. 3. For what reasons are plant assets retired? Define inadequacy, supersession, and obsolescence. 4. What are the major factors considered in determining what depreciation method use? 5. List the similarities and the differences in accounting treatments of depreciation and cost depletion.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 9Q: Explain the difference between depreciation, depletion, and amortization.
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Question
1. Distinguish among depreciation , depletion and amortization.
2. Identify the factors that are relevant in determining the annual depreciation charge and explain whether these factors are determined objectively or whether they are based on judgment.
3. For what reasons are plant assets retired? Define inadequacy, supersession, and obsolescence.
4. What are the major factors considered in determining what depreciation method use?
5. List the similarities and the differences in accounting treatments of depreciation and cost depletion.
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