What characteristics of a plant asset make it different from other assets? Why does GAAP require depreciation for certain plant assets? The balance in an Accumulated Depreciation - Equipment account does not represent funds to replace the equipment when it wears out; instead, what does it represent?
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Respond to the following in a minimum of 175 words:
What characteristics of a plant asset make it different from other assets? Why does GAAP require
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- Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets? a. Salvage value b. Estimated useful life c. Cash needed to replace the plant asset d. CostWhat characteristics of a plant asset make it different from other assets? Why does GAAP require depreciation for certain plant assets? The balance in an Accumulated Depreciation - Equipment account does not represent funds to replace the equipment when it wears out; instead, what does it represent?What is the effective life of an asset? a. The total period of ownership of the asset, including when it is not installed and ready for use.. b. The period prior to the asset being abandoned or scrapped. c. The period that the asset can be used for income-producing purposes. d. All of the above.
- 5. 1.) What is the difference between current assets and plant and equipment? Do you think land should be allowed to depreciate? 2.) What is the difference between depreciation expense and accumulated depreciation? Why does the book value of an asset never go below the residual value?Tom Parkey has prepared the following list of statements about depreciation. 1. Depreciation is a process of asset valuation, not cost allocation.2. Depreciation provides for the proper recording of expenses (efforts) with revenues (results).3. The book value of a plant asset should approximate its fair value.4. Depreciation applies to three classes of plant assets: land, buildings, and equipment.5. Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time.6. The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence.7. Recognizing depreciation on an asset results in an accumulation of cash for replacement of the asset.8. The balance in the Accumulated Depreciation account represents the total cost that has been charged to expense since placing the asset in service.9. Depreciation expense and accumulated depreciation are reported on the income statement.10. Four…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.
- Which of the following statements is (are) correct?a. Accumulated depreciation represents a cash fund beingaccumulated for the replacement of plant assets.b. The cost of a machine includes the cost of repairingdamage to the machine during the installation process.c. A company may use different depreciation methods inits financial statements and its income tax return.d. The use of an accelerated depreciation method causesan asset to wear out more quickly than does use of thestraight-line method.Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets? Question 21 options: Salvage value Estimated useful life Cash needed to replace the plant asset CostWhich of the following statements is true regarding the amortization of intangible assets? a. Intangible assets with a limited useful life are not amortized.b. The service life of an intangible asset is always equal to its legal life.c. The expected residual value of most intangible assets is zero.d. In recording amortization, Accumulated Amortization is always credited.
- Which of the following items is not a consideration when recording periodic depreciation on plant assets? Question 9 options: Salvage value Estimated useful life Cash needed to replace the plant asset CostExplain the reasons for the impairment and the justification for treating the write-down as a permanent decline in value of the asset(s). A difference between the book value of plant assets and the fair value generally exists.Explain the role technology and obsolescence have in the impairment of assets.In computing depreciation, salvage value is which of the following? subtracted from accumulated depreciation to determine the plant asset's depreciable cost. an estimate of a plant asset's value at the end of its useful life. ignored in all the depreciation methods. the fair value of a plant asset on the date of acquisition.