1. Depreciation is best described as a method of a. Asset valuation b. Current value allocation c. Cost allocation d. Useful life determination
1. Depreciation is best described as a method of a. Asset valuation b. Current value allocation c. Cost allocation d. Useful life determination
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:1. Depreciation is best described as a method of
a. Asset valuation
b. Current value allocation
Cost allocation
C.
d. Useful life determination
2. All of the following factors are considered in determining
the useful life of an asset, except
a. Expected usage of the asset
b. Expected physical wear and tear
c. Technical obsolescence
d. Residual value
3. Technical or commercial obsolescence arises from
a. Expected usage of the asset
b.
c.
Expected physical wear and tear
Change or improvement in production or change in the
market demand for the product output of the asset
d. Expiry date of related lease of the asset
4. The production method of depreciation results in
a. Constant charge over the useful life of the asset.
b. Decreasing charge over the useful life of the asset.
c. Increasing charge over the useful life of the asset.
d. Variable charge based on the expected use or output of
the asset.
5. What factor must be present under the production method
of depreciation?
a. Total units to be produced can be estimated
b. Production is constant over the life of the asset
c. Repair costs increase with use
d. Obsolescence is expected
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