Which of the following is a false statement about depreciation? It has no impact on cash It represents the physical deterioration of an asset It exists because of the matching principle Accelerated methods of calculating depreciation are acceptable under GAAP

Which of the following is a false statement about depreciation? It has no impact on cash It represents the physical deterioration of an asset It exists because of the matching principle Accelerated methods of calculating depreciation are acceptable under GAAP

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 7CYBK

See similar textbooks

Similar questions

Explain why depreciation on an existing asset is always irrelevant.
Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.
Which of the following statements about depreciation is not true? A. Depreciation does not mirror the actual loss of value over time. B. Depreciation is the allocation of the asset’s cost to expense over the expected years of use. C. If the fair value of the asset increases, depreciation is reversed to reflect the change in value. D. U.S. GAAP requires depreciation methods to be systematic and rational.
Which of the following statements about MACRS is false?A. Depreciable assets are assumed to have no residual or salvage value.B. Every depreciable asset is assigned to one of ten recovery periods.C. Allowable depreciation methods are based on the assets assigned recovery period.D. None of the above is false. please explain without plagiarism
Which of the following is not a factor in selecting a depreciation method? a. salvage valueb. repair and maintenance costsc. Inflationd. the risk associated with the cash flows from the asset
Which of the following is true regarding special issues in accounting for long-term assets?A. An asset’s useful life can never be changed.B. An asset’s salvage value can never be changed.C. Depreciation expense calculations may need to be updated using new and more accurate estimates.D. Asset values are never reduced in value due to physical deterioration.
Which statement regarding depreciation is incorrect? * Depreciation of noncurrent operating assets is an accounting process for the purpose of allocating asset costs over the periods benefited by use of the assets Service value declines as a function of time rather than use, is the assumption on which straight-line depreciation is based The composite depreciation method does not recognize gain or loss on the retirement of specific assets in the group. The double-declining-balance method ignores salvage value in calculating periodic depreciation expense. none of the above
MCQ: Choose only the correct answer Which of the following statements is false? (a) Financial Instruments are intangible assets (b) Goodwill is not amortizable (c) Goodwill can be identified only in business combination situation (d) Straightline method is generally used to calculate amortazation Which of the following will not be considered while calculating the depletion base? (a) Acquisition costs (b) Tangible development costs (c) Restoration Costs (d) Intangible development costs Which of the following will not be included into the the original cost of a land? (a) Legal fees (b) Brokers' commision (c) Property taxes (D) Accrued property taxes of previous owner The journal entry to record the transportation cost paid by the purchaser under periodic inventory system is- (a) Inventory Dr. and Cash Cr. (b) Transportation-in Dr. & Cash Cr. (c) Delivery Expense Dr. & Cash Cr. (d) Transportation-Out Dr. & Cash Cr. In case of change in estimate of useful life for a tangible…
Which of the following is a false statement regarding revaluation of PPE?A. Revalued amount is either fair value or depreciated replacement cost.B. If simultaneous revaluation is not possible, revaluation can be done on arolling basis provided revaluation of the class of assets is completed withina short period of time and provided the revaluations are kept up to date.C. The difference between the PPE’s carrying amount and its revalued amount isknown as revaluation surplus and should be presented in the statement ofcomprehensive income, net of applicable tax.D. When an asset's carrying amount is increased as a result of revaluation, theincrease shall always be credited to revaluation surplus regardless of theexistence of previous impairment loss recognized. Which of the following should be included as cost of inventory?A. Depreciation expense of the delivery equipment.B. Depreciation expense of the factory machinery.C. Storage cost of finished goods.D. None from the choices. In…
According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? The main purpose of depreciation is to reflect the fall in value of an asset over its useful life When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside A change in depreciation method constitutes a change in accounting policy and must be accounted for as such
According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? The main purpose of depreciation is to reflect the fall in value of an asset over its useful life When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside A change in depreciation method constitutes a change in accounting policy and must be accounted for as such A (1) and (4) B (2) and (3) C (4) only D None of the statements is correct
It is the gradual diminution of the useful value of tangible property resulting from wear and tear and normal obsolescence. It is also applied to the amortization of intangible assets the use of which in the trade or business is definitely limited in duration. Group of answer choices Depreciation Depletion Obsolescence Bad debts