All of the following are consequences of disposing a capital cost asset, EXCEPT: a. Recapture of CCA b. Terminal Loss c. Capital Gain d. Terminal Gain
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All of the following are consequences of disposing a capital cost asset, EXCEPT:
Recapture of CCA
Terminal Loss
Terminal Gain
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- When a destroyed business asset is replaced, which of the following is true? a. The excess replacement cost over the carrying value of the destroyed asset is capitalized. b. The replacement cost is capitalized and the carrying value is deductible as loss. c. The replacement cost is capitalized and the carrying value is disregarded. d. Answer not givenWhich of the following statements about capitalizing costs is correct?A. Capitalizing costs refers to the process of converting assets to expenses.B. Only the purchase price of the asset is capitalized.C. Capitalizing a cost means to record it as an asset.D. Capitalizing costs results in an immediate decrease in net income.In which of the following situations would a cost incurred after an asset’s acquisition be capitalized? A.The useful life of the asset is increased. B.The amount of the expenditure must be immaterial. C.The expenditure is necessary to maintain the working order of the asset. D.There is no increase in the useful life of an asset.
- The key characteristic for theclassification of an asset as ‘held for sale’ is that the carrying amount ofthe asset must _________________. a Be lower than initial cost of the asset. b Be higher than its net realizable value. c Principally be recovered through continuing use. d Principally be recovered through a sale transaction.When an impairment loss occurs, the carrying amount of the asset should be reduced to its a) © Recoverable amount b) Market value c) © Value in use d) • Net present valueThe sale of a depreciable asset resulting in a gain indicates that the proceeds from the sale were a. Less than current market value b. Greater than cost c. Greater than book value d. Less than book value
- What is an impairment loss? A ) The amount by which the carrying amount of an asset exceeds the book value B ) The amount by which the carrying amount of an asset exceeds the recoverable amount C ) The difference between the fair value of an asset and the net realisable value of the asset D ) The amount by which the market value of an asset exceeds the net present valueHello, I need your help. How should acquisition related costs such as due diligence and legal costs be accounted for? expensed as incurred As part of the total consideration As a reduction in equity As a deferred assetAll financial assets are initially measured at fair value plus transaction costs, except A. Amortized cost C.None of these C. Fair value through profit and loss D. Fair value through OCI
- The book value of an asset is equal to thea. Replacement cost.b. Asset’s cost less accumulated depreciation.c. Asset’s fair value less its historical cost.d. Historical cost plus accumulated depreciation.Under the historical accounting system, depreciation is calculated on the original cost of fixed assets with the result that only an amount equivalent to the original cost of the fixed assets is available for its replacement when its life is over. This results in which of the following problem? a. Mixing up of the holding gains and operating gains b. Fixed assets values are unrealistic c. Return on capital employed misleading d. Insufficient provision of depreciationDepreciation is a process of asset valuation where an asset's book value (cost less accumulated depreciation) often approximates it fair value. Do you agree or disagree? Explain why or why not.