Which is not an essential characteristic of property, plant, and equipment? a. These are tangible assets. b. These assets are used in production or supply of goods and services. c. These assets are expected to be used over a period of more than one year. d. These assets are subject to depreciation.
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9. Which is not an essential characteristic of property, plant, and equipment?
a. These are tangible assets.
b. These assets are used in production or supply of goods and services.
c. These assets are expected to be used over a period of more than one year.
d. These assets are subject to
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- According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? 1.The main purpose of depreciation is to reflect the fall in value of an asset over its useful life 2.When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement 3.The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside 4.A change in depreciation method constitutes a change in accounting policy and must be accounted for as such4. The most appropriate definition of depreciation is: A. A means of determining the decrease in the market value of an asset over time B. A means of allocating the cost of an asset over a number of accounting periods C. A means of setting funds aside for the replacement of the asset D. A means of estimating the current value of the assetWhich of the following best describes depreciation? A.ccounts for the market value of a physical asset B.Part of the cost of a physical asset allocated as an expense to each time period in which the asset is used. C.Shows the increase in value of a physical asset over the asset’s useful life D.Shows the drop in value of an asset when the asset is first used by an entity
- 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.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. Cost24. Depreciation Concepts Listed below are concepts and terminology related to depreciation. Required: Match each concept with the related terminology. 1. The period of time over which the company anticipates deriving benefit from the use of the asset 2. The cost of the asset minus its accumulated depreciation 3. The total amount of depreciation expense that has been recorded for an asset since the asset was acquired 4. The amount of cash or trade-in consideration that the company expects to receive when an asset is retired from service 5. A process of cost allocation, not an attempt to measure the fair value of an asset Terminology: depreciation accumulated depreciation book value estimated useful life residual value
- Which of the following characteristics is not common to both tangible and intangible assets? a. held for use and not for investmentb. expected life of more than one yearc. derive value from the ability to generate revenued. may have value only to a particular companyWhat element must be present when determining if an asset is a depreciating asset? a. An asset that holds its value for a period of time or increases in value for a period. b. An asset that has a limited effective life. c. A fixture that completely loses its value. d. An asset that cannot reasonably be expected to decline in value over time.12. How is the matching principle related to the recording of depreciation on tangible operational assets? A. The matching principle requires a company to use the same depreciation. B. Once a particular depreciation method is adopted for a particular asset, the owner must continue to use the same method. C. The accountant who calculates the depreciation may assume that the company will continue in business as long as the estimated useful life of the asset. D. A portion of the cost of the asset should be allocated as an expense for the periods in which the asset helps the business to earn revenue.
- Which of the following is not a requirement for an asset to be depreciable?a. It must have a life longer than 1 year b. It must have a basis(initial purchase plus installation cost) greater than $1,000 c. It must be held with the intent to produce income d. It must wear out or get used up.The write-off of the cost of an intangible asset is called a.deterioration. b.functional depreciation. c.physical depreciation. d.amortization. The write-off of the cost of plant and equipment is called a.amortization. b.depletion. c.depreciation. d.deterioration The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated life in terms of months or years is called the a.straight-line method. b.declining-balance method. c.sum-of-the-years'-digit method. d.units-of-production method.According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? The main purpose of depreciation is to reflect the fall in value of an asset over its useful life When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside A change in depreciation method constitutes a change in accounting policy and must be accounted for as such A (1) and (4) B (2) and (3) C (4) only D None of the statements is correct
