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Which of the following statements is/are FALSE: I. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset’s useful life and increase the asset’s capacity is capitalised. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. V. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of…

Which of the following is INCORRECT regarding depreciation? Select one: O a. It is not a matter of valuation. O b. It is a means of cost allocation. Oc. O d. It is an attempt to reflect the fair market values of the related assets. It is part of the matching of revenues and expenses.

The general rule in the accounting treatment of research and development costs is    A. Capitalize all costs as assets when incurred and amortized when revenue is earned.   B. Treat all costs as current expenses as incurred.   C. Capitalize selectively, and predetermine the conditions that would require capitalization as well as those that would be written off as current expenses.   D. Accumulate all costs in a special intangible asset account until a determination can be made as to the degree of future benefits.

Which of the following most accurately reflects the concept of depreciation as used in accounting? The proccess of charging the decline in value of an economic resource to income in the period in which the benefit occured. O The proccess of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. OA method of allocating asset cost to an expense account in a manner which closely matches the physical deterioration of the tangible asset involved. O An accounting concept that allocates the portion of an asset used up during the year to the contra asset account for the purpose of properly recording fair market value of tangible assets.

ts) Which principle has FASB used to determine the accounting method for recording research and development costs? (7) ہے O Systematic allocation over the life of the asset O Minimization of income tax payments O Associating the cause of the expense with its recognition O Immediate recognition of costs with no certain future benefit

The key difference between amortization and depreciation is that amortization charges off the cost of an intangible asset, while depreciation does so for a tangible asset. True False

Which one of the following statements is not true regarding depreciation? a. It is a systematic, rational method of allocating the cost of an asset over its useful life b. It attempts to match the costs of acquiring an asset to the benefits to bederived from the asset c. It does not attempt to measure the value of the asset d. It provides funds for the replacement of the asset through tax savings over the asset's life

Depreciation can be defined as the measure of cost or revalued amount of economic benefits of a tangible fixed asset that has been consumed during a period. State the principle or conventions that support depreciation and indicates the different measures of this cost (depreciation) as an expense, and assess each measures’ input on Income Statement and the Balance Sheet.

These include both tangible assets such as (b) and intangible assets such as (c). To pay for these assets, they sell (d) assets such as (e). The decision about ...

All of the following are true regarding recovery of impairments for intangible assets except a. After a recovery of impairment has been recognized, the carrying value of the asset reported on the statement of financial position will be the higher of the fair value less cost to sell or the value-in-use. O b. A recovery of impairment will be reported in the "Other income and expense" section of the income statement. C. The amount of the recovery is limited to the carrying value of the asset that would have been reported had no impairment occurred. O d. No recovery of impairment is allowed for goodwill.

It is the initial cost of acquiring an asset, plus sales tax, transportation and normal costs of making asset serviceable. a. Adjusted standard cost O b. Cost basis O c. Standard cost O d. Adjusted cost basis

Which of the following most accurately reflects the concept of depreciation as used in accounting? - The process of charging the decline in value of an economic resource to income in the period in which the benefit occurred.   - A method of allocating asset cost to an expense account in a manner which closely matches the physical deterioration of the tangible asset involved.   - The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.   - An accounting concept that allocates the portion of an asset used up during the year to the contra asset account for the purpose of properly recording the fair market value of tangible assets.

The historical cost principle requires that assets be reported at their: a) Market value b) Replacement cost c) Fair value d) Original cost

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

The cost of an asset that is subject to depreciation is called a.depreciable cost. b.trade-in value. c.salvage value. d.revenue.

Income earned from incidental operations before an asset is put to use is:   deducted from the cost of the asset added to the cost of the asset immediately recognized in P/L together with related expense ignored