When a company revises an estimate used to record depreciation expense, the company should revise depreciation by using the formula (_______ - revised salvage value)/revised remaining useful life.
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- 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.Place T or F in front of each of the following statements. 1. The straight-line method of depreciation is based on the assumption that depreciation expense can be regarded as a constant function of time. 2. Plant assets should be written down (below cost) when their market value has declined temporarily. 3. The accounting profession has developed specifically recommended procedures for recording appraisal increases with respect to plant assets. 4. An asset's cost minus its accumulated depreciation equals its book value. 5. The sum-of-the-years'-digits method of depreciation ignores salvage value in the computation of an asset's depreciable base. 6. When using the double-declining balance method of determining depreciation, a declining percentage is applied to a constant book value. 7. The book value of plant assets initially declines more rapidly under decreasing-charge methods than under the straight-line method. 8. Accounting depreciation is computed by…1. Depreciation is referring to the allocation of the depreciable amount over its estimated useful life. TRUE/FALSE 2. Recording depreciation on non-current asset affects the statement of financial position and statement of profit or loss. TRUE/FALSE 3. In calculating depreciation, both non-current asset cost and useful life are based on estimates. TRUE/FALSE 4. Under reducing balance method, the depreciation rate used each year remains constant. TRUE/FALSE 5. The book value of non-current asset is calculated as cost of the assets minus accumulated depreciation. TRUE/FALSE 6. Estimated value of an asset at the end of its useful life is known as “salvage value”. TRUE/FALSE
- What is the correct process for determining depreciation expense for partial periods? A: The straight line method should be used for the first year of the assets life. B: The salvage value should be equal to last year's depreciation amount. C: No depretiation should be expensed in the year of acquisition. D: Depreciation for physical years should be broken up between fiscal years.Net income is understated if, in the first year, estimated salvage value is excluded from the depreciation computation when using the Straight-lineMethod Production orUse Method 1. Yes Yes 2. No Yes 3. Yes No 4. No No#1-5 please, thank you! listed below are various Types of accounting changes and errors. 1. Change in the amortization period for a trademark. 2. Change in the double-declining-balance methodto straight-line method of depreciation.3. Change from FIFO to average-cost inventory method.4. Change from percentage-of-completion tocompleted-contract method on constructioncontracts. 5. Change in equipment's salvage value. instructions: For each change or error, indicate how it would be accounted for using thefollowing letter codes:A. Accounted for prospectivelyB. Accounted for retrospectivelyC. Prior period adjustment
- 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.Which of the following represents an event that is less routine when accounting for long-term assets? A. recording an asset purchase B. recording depreciation on an asset C. recording accumulated depreciation for an asset or asset category D. changing the estimated useful life of an assetWhich of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle? a. Revenue b. Depreciation expense c. Gain on disposal d. Equipment
- Using the following information, A. Make the December 31 adjusting journal entry for depreciation. B. Determine the net book value (NBV) of the asset on December 31. Cost of asset, $195,000 Accumulated depreciation, beginning of year, $26,000 Current year depreciation, $13,0003-Which method of depreciation considers that the asset has greater service potential in the earlier years a. Diminishing balance method b. Units of production method c. Straight line method d. Fixed depreciation methodThe most appropriate reason for an increase in depreciation expense is that a. Depreciation for prior periods was overstated. b. Major repairs were not recorded. c. A depreciable asset was impaired. d. Retained earnings have been appropriated for a possible loss on retirement. e. Based on a re-evaluation, estimated salvage values have been lowered.
