Assuming that there are no income taxes, which of the following is correct concerning depreciation? Select one: a. Depreciation reduces net income but does not change cash from operations. b. Depreciation provides less cash from operations than would have been available without the depreciation. c. Depreciation builds a cash reserve to fund the replacement of plant, property and equipment d. None of the other choices is correct. e. Depreciation increases cash from operations and decreases net income

Assuming that there are no income taxes, which of the following is correct concerning depreciation? Select one: a. Depreciation reduces net income but does not change cash from operations. b. Depreciation provides less cash from operations than would have been available without the depreciation. c. Depreciation builds a cash reserve to fund the replacement of plant, property and equipment d. None of the other choices is correct. e. Depreciation increases cash from operations and decreases net income

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA1: International Financial Reporting Standards

Section: Chapter Questions

Problem 9MCQ

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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.
Depreciation is the reduction in the usable value of fixed assets due to normal wear and tear of time. Depreciation is an indirect non — cash expenditure which is provided on SLM or WDV basis. Rahul is new junior accountant with Hardwork Mills Private Limited he wants to understand normal depreciation differs from additional depreciation. As a tax adviser, guide him on the two concepts and discus the cases where additional depreciation is not allowed.
A company is deciding whether to purchase a new machine or not, which among the following is not a relevant cash flow to this decision. a. Depreciation expense b. Additional sales generated c. Tax allowance arising d. Purchase price
please dont provide answer in image format thank you Under the historic cost approach, the depreciation charges will be based totally on the original value of the assets, which might also be decrease than the modern-day market value. As a result, the pronounced earnings for the duration will be greater than if the market cost strategy had been chosen. Similarly, the announcement of cash flows will be affected, as the money outflows for the buy of the assets will be decrease below the historic price approach. what does the sentence mentioned above mean? please explain
Which of the following statements is false? A For tax purposes, companies can use the MACRS depreciation method. B When you change a depreciation estimate, such as salvage value, you need to make an adjustment to retained earnings. C If the expected future cash flow is less than the carrying amount, the asset is considered impaired. D If an impairment loss is recorded, depreciation must be recalculated since the book value changed. The answer A is wrong
Which of the following statements is false? A For tax purposes, companies can use the MACRS depreciation method. B When you change a depreciation estimate, such as salvage value, you need to make an adjustment to retained earnings. C If the expected future cash flow is less than the carrying amount, the asset is considered impaired. D If an impairment loss is recorded, depreciation must be recalculated since the book value changed.
Which of the following transactions would not increase the fixed asset turnover ratio? Group of answer choices A)An increase in sales revenue. B)A profitable sale of fixed assets for cash. c)Selling manufacturing equipment for a loss. d)A decrease in operating expenses. E)All of the above would increase the fixed asset turnover ratio
Question. Depreciation is the reduction in the usable value of fixed assets due to normal wear and tear of time. Depreciation is an indirect non – cash expenditure which is provided on SLM or WDV basis. Rahul is new junior accountant with Hardwork Mills Private Limited he wants to understand normal depreciation differs from additional depreciation. As a tax adviser, guide him on the two concepts and discus the cases where additional depreciation is not allowed.
Ringler Corporation exchanges one plant asset for a similar plant asset and gives cash in the exchange. The exchange is not expected to cause a material change in the future cash flows for either entity. If a gain on the disposal of the old asset is indicated, the gain will Group of answer choices A) be reported in the Other Revenues and Gains section of the income statement. B) effectively reduce the amount to be recorded as the cost of the new asset. C) effectively increase the amount to be recorded as the cost of the new asset. D) be credited directly to the owner's capital account.
Which of the following statements is true about assessing recoverability of property, plant and equipment? Group of answer choices If the sum of the undiscounted future cash flows exceeds the carrying value of the asset, then the asset is not impaired. If the sum of the undiscounted future cash flows exceeds the carrying value of the asset, then the asset is impaired. If the sum of the discounted future cash flows exceeds the carrying value of the asset, then the asset is not impaired. If the sum of the discounted future cash flows exceeds the carrying value of the asset, then the asset is impaired.
If a firm must forgo a cash flow, not leasing an owned building for example, in order to accept some investment project, are the lost cash flows included in the analysis?
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