Depreciation is: Oa. the loss in market value of an asset. Ob. the allocation of a long-term asset's cost to an expense account over the asset's life. Oc. an increase in an asset's value over time or usage. d. none of the above.
Q: The book value of a depreciable asset is A. The original cost of the asset. B. The…
A: Book value of a depreciable asset means value at which that asset is shown in the balance sheet of…
Q: depreciation is a. the decrease in value of a fixed asset due to ear and tear, passage of time, or…
A: When any business purchase any fixed assets, then every year value of the assets will decrease due…
Q: Depreciation is generated due to a. Increase in the value of liability Ob. Decrease in capital…
A: Lets understand the meaning of depreciation. Depreciation is a reduction in value of asset due to…
Q: 1)If an asset value recovers after an impairment loss has been recognized for the asset, what amount…
A: Since, you have posted more than one question, we will answer the first question for you. If you…
Q: When the useful life of an asset is more accurately defined in terms of how much it is used rather…
A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…
Q: 4. The most appropriate definition of depreciation is: A. A means of determining the decrease in the…
A: Introduction:- The following methods used to calculate depreciation as follows under:- Straight…
Q: Depreciation represents a __________ in the value of fixed assets.
A: Fixed assets are those type of assets which are being held by the business for longer period of…
Q: Why is depreciation provided on non-current assets? a. so that the business entity concept is…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is…
A: An asset is depreciable till the level of residual value only. When the WDV of an assets comes to…
Q: It is a permanent reduction in the value of a company's asset Depreciation Impairment Revaluation…
A: The term depreciation applies to tangible assets like machinery, furniture, vehicles and building…
Q: The adjusted basis of an asset is the original cost (or basis) plus capital recoveries less capital…
A: Adjusted basis: The amount of original cost, plus additional investments (capital expenditure) and…
Q: Assets that are NOT expected to provide benefits for a number of accounting periods are called…
A: Solution: Assets that are NOT expected to provide benefits for a number of accounting periods are…
Q: The difference between book value of the asset with the proceeds received from its sale, will…
A: The book value of the asset is the cost of the asset less accumulated depreciation.
Q: which method of depreciation is used when the cost of an asset is written off in equal amounts over…
A: Depreciation represents the reduction in the value of an asset over an expected life.
Q: The cost of an asset that is subject to depreciation is called a.depreciable cost. b.trade-in…
A: Depreciable cost is that portion of cost of asset which can be depreciated. Trade in value relates…
Q: The process of transferring the cost of an asset to an expense account over time is called O A)…
A: Property, plant, and equipment: These assets are long lived economic resources which are owned by…
Q: Over the life of a depreciable asset, its recorded cost decreases, the related accumulated…
A: Asset is recorded in the books of account at cost which is depreciated over the useful life of an…
Q: Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is…
A: Depreciation: It implies to a reduction or fall in the value of fixed assets as a result of its…
Q: ‘carrying value’ of a depreciable asset is the difference between
A: Carrying value of an asset gives value of Company's asset as on given date after provision of wear…
Q: True or False: Depreciation is the decline in the market value of tangible fixed assets.
A: Fixed assets are assets having a life of more than one year. Fixed assets like buildings, equipment,…
Q: Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is…
A: An asset can only be depreciated up to the level of residual value. When it reaches the residual…
Q: The sale of a depreciable asset resulting in a gain indicates that the proceeds from the sale were…
A: Depreciable assets are those fixed assets on which depreciation is charged over the years and net…
Q: Long term assets without any physical existence but, possessing a value are called Current assets O…
A: (d) intangible assets is the correct option. Intangible assets : intangible assets are those assets…
Q: fhich of the tfollowing statement best describes depreciation? a. It is a means of spreading the…
A: Fixed assets: These are the assets which were used in the business for more than one year. These…
Q: The book value of an asset is defined as ____________________. a. Estimated fair market value b.…
A: Book Value of an asset is the measure of the historical cost of an asset decreased by the total…
Q: The book value of an asset is equal to thea. Replacement cost.b. Asset’s cost less accumulated…
A: Every asset has a limited period of life. With the continuous use of an asset in the course of…
Q: Which of the following characteristics is not common to both tangible and intangible assets? a.…
A: Tangible assets refers to the assets which have physical form while intangible assets lack physical…
Q: hich of the following statement best describes depreciation? a. It is a means of spreading the…
A: Explanation:Depreciation isn't the result of fluctuations within the value of fixed assets since,…
Q: (a) When would the disposal of a long-term asset result in no gain or loss? (b) When would the…
A: Long-term assets can be defined as those assets which are held by an investor for a period of more…
Q: The depreciation increases the book value of equipment shown in the balance of its accumulated…
A: In accounting terms, depreciation is defined as the reduction of recorded value of a fixed asset in…
Q: For some of the fixed assets of a business, the balance in Accumulated Depreciation is equal to the…
A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…
Q: Depreciation is a process of: a. Asset devaluation b. Cost accumulation c. Cost allocation d.…
A: Depreciation is the process of cost allocation of an asset. It is made due to the wear and tear and…
Q: Accumulated depreciation is record on the balance sheet as ___? A. A reduction in corresponding…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: the equation for book value is: book value = cost of an asset minus its accumulated depreciation.…
A: Asset: Asset is a resource owned by a company from which future economic benefits are expected to…
Q: The following would affect the net income on the last year of the useful life of a long-lived asset…
A: Long lived assets are the fixed assets of the business, which are held by the business for the…
Q: The estimated economic life of an asset is also known as ________. A. residual value. B.…
A: Estimated life refers to the estimated economic life or useful life which means the assets will be…
Q: The factors used to compute depreciation expense are an asset's: O Cost, residual value, and service…
A: Depreciation expense is the amount which shows the decrease in the value of asset over its useful…
Q: The allocation of the cost of a tangible asset to expense in the periods in which the asset is used…
A: Tangible assets are physical assets of a company such as land, building, machine which is used to…
Q: According to PFRS 9, impairment gain
A: As per PFRS9 impairment losses and impairment gains (in the case of purchased or originated…
Q: Depreciation occurs as a result of: A. Wear and tear B. Decrease in the value of assets C. Increase…
A: Since depreciation is occurse as a result of normal wear and tear and due to which it causes a…
Q: When an asset is sold, the accumulated depreciation account for the asset must be closed off to the…
A: The Depreciation expense is charged as reduced on the Value of fixed assets with passage of time.
Q: 1. What amount should be recorded initially as cost of the right of use asset? 2. What is the…
A: Sometimes company gets the asset on lease means the ownership of the asset remains with the actual…
Q: The difference between the purchase cost of an asset and its value at the end of the life is known…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: When an item of property, plant and equipment is derecognised, the treatment of any revaluation…
A: When a asset is revalued and if there is any revaluation gain then such revaluation gain should be…
Q: Assets are usually valued at? a.Historical Cost b. Residual Value c. Net Realizable Value d.…
A: Assets are the resources that are owned by the organizations. Assets can be current or non-current.
Q: Depreciation expense under the invenroty system is a. Based on cost minus residual value b.…
A: Depreciation = (Cost - Residual value) / Life of asset
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- LO1 The purpose of depreciation is to (a) spread the cost of an asset over its useful life. (b) show the current market value of an asset. (c) set up a reserve fund to purchase a new asset. (d) expense the asset in the year it was purchased.LO1 The purpose of depreciation is to record the assets market value in the accounting records.Characteristics of Depreciation Methods Below is a common list of depreciation methods and characteristics related to depreciation. Depreciation Methods a. Straight-line depreciation method b. Declining balance depreciation method c. Units-of-production depreciation method when actual units produced increases over the life of the asset Characteristics 1. Results in depreciation expense that decreases over the life of the asset. 2. Results in depreciation expense that increases over the life of the asset. 3. Allocates the same amount of cost to each period of a depreciable assets life. 4. Calculated by multiplying a constant depreciation rate by depreciable cost. 5. Calculated by applying a constant depreciation rate to the assets book value at the beginning of the period. 6. Results in lowest income taxes in early years of the assets life. 7. Consistent with the matching principle. Required: Match one or more of the depreciation methods with each characteristic.
- Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is called “depreciation”. Statement 2: And, “depreciation” on the other hand, is the systematic allocation of theamount of depreciation of an asset over its useful life. a. Statement 1 is correct b. Statement 2 is correct c. Both statements are correct d. Both statements are wrong24. 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 valueStatement 1: The cost of an asset, or other amount substituted for cost, less its residual value is called “depreciable amount”. Statement 2: And, “depreciation” on the other hand, is the systematic allocation of the amount of depreciation of an asset over its useful life. a. Statement 1 is correct b. Statement 2 is correct c. Both statements are correct d. Both statements are wrong
- Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is called “depreciable amount”. Statement 2: And, “depreciation” on the other hand, is the systematic allocation of the amount of depreciation of an asset over its useful life. Statement 1 is correct Statement 2 is correct Both statements are correct Both statements are wrong32 Which of the following information is necessary to apply the straight-line method of depreciation for an asset? A. Initial cost, useful life of asset and residual value. B. Useful life of asset and residual value. C. Initial cost and useful life of an asset. D. Residual value and initial cost(Multiple Choice Question) Amortizable Cost refers to 1. An asset's Net Book Value minus its Accumulated Amortization 2. The added cost of a capital asset after undergoing a capital improvement 3. The portion of the cost of the asset that will amortize over its useful life 4. The entire cost of a capital asset
- Question 36: Match each depreciation function with its best description. SLN SYD DDB Results in the same depreciation expense each period Bases depreciation on the number of years in the asset's useful life Accelerated depreciation method that doesn't consider salvage value in the initial calculations46. Evaluate the following statements: S1. In the sum-of-the-years'-digits method, residual value is not used in the computations of depreciation expense. S2. Straight-line depreciation assumes equal usefulness in each time period, and the periodic charge is not affected by asset productivity or efficiency variations. S3. The residual value of an asset is deducted from the depreciable base when calculating double-declining-balance depreciation. a. True, False, True b. False, True, False c. False, False, True d. False, False, False e. True, True, False f. True, True, True g. False, True, TrueQuestion: In calculating depreciation, the number of years of useful life of the asset is:1. an estimate.2. based on the cost of the asset.3. the estimated time period before repairs or maintenance will be required.4. known with certainty.
