Which of the following will cause a company to show a lower amount of amortization ofintangible assets in the first year after acquisition?A. A higher residual valueB. A higher amortization rateC. A shorter useful life
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Which of the following will cause a company to show a lower amount of amortization of
intangible assets in the first year after acquisition?
A. A higher residual value
B. A higher amortization rate
C. A shorter useful life
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- Question: Which method of depreciation results in a higher depreciation expense in the early years of an asset's life, making it more suitable for assets that rapidly lose their value? A) Straight-Line Depreciation B) Declining Balance Depreciation C) Units-of-Production Depreciation D) Sum-of-the-Years'-Digits DepreciationA 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 yearIn relation to evaluating non-current assets, indicate which of the following statements is TRUE? 1. The higher the asset turnover, the more effective a company is in using its resources to generate sales. 2. Too high a depreciation rate will result in increased reported profits for the period. 3. All non-current assets must be depreciated. 4. The older the assets are, the better the company is performing.
- Jordan’s response about his approach to estimating a company’s need to reinvest in itsproductive capacity is most likely correct regarding:A. estimating the average age of the asset base.B. estimating the total useful life of the asset base.C. estimating the average remaining useful life of the asset base1. Which of the statements is incorrect concerning the depreciation methods? a) Under the output method, the cost per unit of production is constant. b) The straight-line method is particularly appropriate where the asset is expected to decline in usefulness as a function of time and the expected use pattern of the asset is fairly constant over time. c) The sum of the years' digits method provides for a decreasing depreciation charge. d) First-year depreciation under the double declining balance method is computed as the depreciable amount multiplied by double the straight-line rate. e) None of the choices is incorrect 2. All of the following statements are true, except: a) Property acquired in exchange for shares or other securities of the enterprise should be recorded at its fair value or the fair value of the securities, whichever is more clearly evident b) When property is acquired in exchange for another, its cost is usually determined by reference to the fair value of the asset…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?
- Which of the following statements is true when comparing double declining balance depreciation to straight-line depreciation? a. Double declining balance deductions will be greater than straight-lin e deductions in all years of the asset’s depreciable life b. Double declining balance deductions will be greater than straight-line deductions in early years of the asset’s depreciable life but less in later years c. Straight-line deductions will be greater than double declining balance deductions in all years of the asset’s depreciable life d. Double declining balance deductions will be less than straight-line deductions in early years of the asset’s depreciable life but greater in later yearsFor financial accounting purposes, depreciation expense represents the decreasein an asset's fair market value. Select one: True False The total amount of depreciation taken over the life of a depreciable asset should be less if the double-declining balance depreciation method is used than if the straight-line method is used. Select one: True FalseThe depreciation method used shall reflect the pattern in which the asset’s future economic benefits areexpected to be consumed by the entity. Which statement is incorrect regarding depreciation methods?a. Straight-line depreciation results in a constant charge over the useful life if the asset’s residual value does not change.b. The diminishing balance method results in a decreasing charge over the useful lifec. The units of production method results in a charge based on the expected use or outputd. A depreciation method that is based on revenue that is generated by an activity that includes the use of an asset is appropriate.
- Which of the following is considered when depreciating an asset under the cost model? The cost of the asset. The change in the fair value of the asset. The useful life of the asset. Both a and b. Which of the following depreciation methods will most likely result in the highest amount of reported profit in the early years of an asset’s useful life? Straight line 150% declining balance Double declining balance Sum-of-the-years’ digits The most commonly used depreciation method is the straight-line method. replacement method. depreciation method based on revenue. inventory method.An accelerated depreciation method that takes more expense in the first few years of the assets life is ________. A. units-of-production depreciation B. double-declining-balance depreciation C. accumulated depreciation D. straight-line depreciationWhich of the following transactions would not increase the fixed asset turnover ratio? Group of answer choices A)An increase in sales revenue. B)A profitable sale of fixed assets for cash. c)Selling manufacturing equipment for a loss. d)A decrease in operating expenses. E)All of the above would increase the fixed asset turnover ratio
