When a business uses the straight-line method of depreciation, the amount of depreciation is reduced from year to year. Why is this wrong.
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When a business uses the straight-line method of
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- 1. When the useful life of an asset is more accurately defined in terms of how much it is used rather than the passage of time, the _____ method is used to calculate depreciation. A. straight-line B. sum-of-the-years' digits C. units-of-production D. declining-balance 2.The name given to tax rules for getting back or recovering through depreciation deductions the cost of property used in a trade or business, or to produce income is known as the _____ Accelerated Cost Recovery System. A. Municipal B. Modified C. Minimum D. Maximumdepreciation is a. the decrease in value of a fixed asset due to ear and tear, passage of time, or obsolescence b. wages reach the point, the deductions or withholding) will stop c. record expenses when they occur and not when they are paid, as well as record income when its earned d. report income in the year it is received and deduct expenses in the year paidWhich one of the following statements is true? a. Financial statement readers cannot determine whether the depreciation method used by a company is appropriate. b. Financial statement readers can determine the useful lives of assets depreciated during the reported period. c. Financial statement readers cannot determine the depreciation expense for the reported period d. Financial statement readers can accurately estimate the effect an alternative depreciation method would have on income.
- which of the following statements is not correct? 1) generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset. 2)The book value of a long-term asset is reduced each year as depreciation is recorded Building and trucks are examples of long -term assets 3)Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term asset.For some of the fixed assets of a business, the balance in Accumulated Depreciation is exactly equal to the cost of the asset. (A) Is it permissible to record additional depreciation on the assets if they are still useful to the business? Explain. (B) When should an entry be made to remove the cost and the accumulated depreciation from the accounts? Please use at least 150 words to explain to avoid getting a bad grade.Which of the following is not true about the MACRS depreciation system: A salvage value must be determined before depreciation percentages are applied to depreciable real estate. Residential rental buildings are depreciated over 27.5 years straight-line. Commercial real estate buildings are depreciated over 39 years straight-line. No matter when during the month depreciable real estate is purchased, it is considered to have been placed in service at mid-month for MACRS depreciation purposes.
- Sometimes, for the fixed assets of certain businesses, the balance in Accumulated Depreciation is equal to the cost of the asset. a. Can one record additional depreciation on the assets if the assets are still useful to the business? b. Why? Explain: c. Also, when can such a business make an entry to remove the cost and accumulated depreciation of the fixed assets from the account?Which of the following statements are TRUE? a. The reason for including a treatment of depreciation in this book is to allow you to develop a reasonably accurate report to the owners of a business regarding its value at any given point in time. b. Depreciation spreads investment costs over the useful life of equipment purchased. c. Depreciation allowances can be treated as expenses because they are cash flows. d. Depreciation affects income taxes, which are cash flows.A company should use a depreciation method that: Group of answer choices is randomly selected best reflects the asset’s decline in revenue-producing ability for the company. maximizes net income for the company a different method each year
- Which of the following statements about depreciation is not true? a. Depreciation helps companies estimate the cost of doing business b. U.S. tax law permits deductions from taxable income for depreciation c. Depreciable property may be tangible or intangible d. Depreciation is a cash flow that is recognized as an expense to a business.In subsequent years: Assuming that the asset is depreciable, the absence of depreciation charges in future years will increase the reported profit of those years so that the company's total profits over the entire useful life of the asset will in fact be unaffected by the error. Is that correct?An assets is classified as a fixed asset when ______________ a. It has life less than one year b. It is used in the normal business operations and has life more than one year c. It is bought for long term for resale in future d. It is one which has to be depreciated every year
