Present value of decommissioning and restoration costs are capitalized as PPE and with a corresponding credit to what account?
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Present value of decommissioning and restoration costs are capitalized as PPE and with a corresponding credit to what account?
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- The estimated economic life of an asset is also known as ________. A. residual value B. book value C. salvage life D. useful lifeWhat amounts should be recorded as a cost of a long-term asset?Which 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.
- Decommissioning and restoration costs should be initially capitalized at: historical cost present value carrying value market priceWhich of the following best describes the higher of an asset's net selling price and its value in use? Select one: a. Recoverable amount b. Depreciable amount c. Revalued amount d. Carrying valueThe book value of an asset is defined as ____________________. a. Estimated fair market value b. Cost –Accumulated depreciation c. Cost – salvage – accumulated depreciation d. Cost- Salvage value
- Demonstrates the difference between depreciation costs as expenses and the cash flow generated by the purchase of a fixed asset? Give an example?Which of the following payback methods considers the salvage value in its basic computations? a. Traditional payback b. Bailout payback c. Present value payback d. Discounted paybackAn initial cost of an item in PPE includes: subsequent expenses purchase price administrative expenses salvage value
- Which of the following statements if not true? a. Depreciation is the process of allocating the purchase price of an asset minues its residual value to expense, for each period benefited by the asset. b. The cost of an asset includes all acquisition costs necessary to obtain the benefits to be derived from the asset. c. The service life of an asset is the measure of the number of years of service expected from the asset before its disposal. d. The residual value of an asset is the difference between the expected book value of the asset at the end of its service and the cost of disposal.Which of the following is an essential step in the case of cost/income equivalents for comparing machinery investments: O a. Calculating the liquidation value of the assets O b. Calculating the amortization of the equipment O c. Taking into account the warranty offered on the machinery O d. Calculating the NPV of the investmentAn estimate of how an asset will be used up over its useful life is known as what? a. Depreciation rate b. Impairment value c. Useful life d. Salvage value
