Question 1

Depreciation expense results in an indirect tax savings.

Accepted Answer

A) True 
 B)False

Question 2

Which one is not based on the passage of time?

Accepted Answer

A)  Straight-line method 
B)  Declining-balance method 
C)  Units-of-production method 
D)  None of these 
E)  All of these 
A)  Straight-line method 
B)  Declining-balance method 
C)  Units-of-production method 
D)  None of these 
E)  All of these

Question 3

Residual value means the actual cash one receives at end of the life of the asset.

Accepted Answer

A) True 
 B)False

Question 4

Karen Knoll Co. bought a machine that cost $8,000. The residual value is $1,000, and the machine life is estimated at four years. Can you prepare a depreciation schedule assuming twice the straight-line rate? Karen uses the declining-balance method.

Accepted Answer

@#IMG-DLM& No depreciation exp

Question 5

Physical deterioration is related to an asset's estimated amount of usefulness.

Accepted Answer

A) True 
 B)False

Question 6

Accumulated depreciation records the history of depreciation taken to date.

Accepted Answer

A) True 
 B)False

Question 7

Cost minus residual divided by number of years equals depreciation expense taken each year in the straight-line method.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following does not depreciate?

Accepted Answer

A)  Building 
B)  Land 
C)  Truck 
D)  Computer 
E)  None of these 
A)  Building 
B)  Land 
C)  Truck 
D)  Computer 
E)  None of these

Question 9

A new truck costing $60,000 with a residual value of $6,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:

Accepted Answer

A)  $24,000 
B)  $14,000 
C)  $14,400 
D)  $2,400 
E)  None of these 
A)  $24,000 
B)  $14,000 
C)  $14,400 
D)  $2,400 
E)  None of these

Question 10

A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:

Accepted Answer

A)  $20,000 
B)  $12,000 
C)  $18,000 
D)  $7,200 
E)  None of these 
A)  $20,000 
B)  $12,000 
C)  $18,000 
D)  $7,200 
E)  None of these

Question 11

Depreciation expense is located on the:

Accepted Answer

A)  Income statement 
B)  Balance sheet 
C)  Income statement and Balance sheet 
D)  None of these 
E)  All of these 
A)  Income statement 
B)  Balance sheet 
C)  Income statement and Balance sheet 
D)  None of these 
E)  All of these

Question 12

In the declining-balance method, we can depreciate below the residual value.

Accepted Answer

A) True 
 B)False

Question 13

In the straight-line method, book value never goes below the residual value.

Accepted Answer

A) True 
 B)False

Question 14

Product obsolescence means the asset has been fully depreciated.

Accepted Answer

A) True 
 B)False

Question 15

Land can be depreciated.

Accepted Answer

A) True 
 B)False

Question 16

Bob bought a new delivery truck for his drug store for $30,000. The residual value is $3,000 with an expected life of five years. Assuming twice the straight-line rate, calculate the book value at the end of year 2 for the declining-balance method.

Accepted Answer

The answer of Bob bought a new delivery truck for...

Question 17

If a car is driven strictly for pleasure, it still can be depreciated.

Accepted Answer

A) True 
 B)False

Question 18

Trade-in value is the same as the residual value.

Accepted Answer

A) True 
 B)False

Depreciation expense results in an indirect tax savings.

Which one is not based on the passage of time?

Residual value means the actual cash one receives at end of the life of the asset.

Karen Knoll Co. bought a machine that cost $8,000. The residual value is $1,000, and the machine life is estimated at four years. Can you prepare a depreciation schedule assuming twice the straight-line rate? Karen uses the declining-balance method.

Physical deterioration is related to an asset's estimated amount of usefulness.

Accumulated depreciation records the history of depreciation taken to date.

Cost minus residual divided by number of years equals depreciation expense taken each year in the straight-line method.

Which one of the following does not depreciate?

A new truck costing $60,000 with a residual value of $6,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:

A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:

Depreciation expense is located on the:

In the declining-balance method, we can depreciate below the residual value.

In the straight-line method, book value never goes below the residual value.

Product obsolescence means the asset has been fully depreciated.

Land can be depreciated.

Bob bought a new delivery truck for his drug store for $30,000. The residual value is $3,000 with an expected life of five years. Assuming twice the straight-line rate, calculate the book value at the end of year 2 for the declining-balance method.

If a car is driven strictly for pleasure, it still can be depreciated.

Trade-in value is the same as the residual value.

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters

Exam 17: Depreciation

Depreciation expense results in an indirect tax savings.

Which one is not based on the passage of time?

Residual value means the actual cash one receives at end of the life of the asset.

Karen Knoll Co. bought a machine that cost $8,000. The residual value is $1,000, and the machine life is estimated at four years. Can you prepare a depreciation schedule assuming twice the straight-line rate? Karen uses the declining-balance method.

Physical deterioration is related to an asset's estimated amount of usefulness.

Accumulated depreciation records the history of depreciation taken to date.

Cost minus residual divided by number of years equals depreciation expense taken each year in the straight-line method.

Which one of the following does not depreciate?

A new truck costing $60,000 with a residual value of $6,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:

A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is:

Depreciation expense is located on the:

In the declining-balance method, we can depreciate below the residual value.

In the straight-line method, book value never goes below the residual value.

Product obsolescence means the asset has been fully depreciated.

Land can be depreciated.

Bob bought a new delivery truck for his drug store for $30,000. The residual value is $3,000 with an expected life of five years. Assuming twice the straight-line rate, calculate the book value at the end of year 2 for the declining-balance method.

If a car is driven strictly for pleasure, it still can be depreciated.

Trade-in value is the same as the residual value.

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Discounts: Trade and Cash

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters