7. It is an amount which a willing buyer will pay to a willing seller for the property where each has equal advantage and is under no compulsion to buy or sell. A. Use value C. Market value B. Salvage value 8. The amount that the property would give if sold for junk. A. Junk value C. Salvage value D. Book value B. Book value D. Scrap value 9. A type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results. A. Physical depreciation B. Design depreciation C. Functional depreciation D. Demand depreciation

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
Section: Chapter Questions
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7-9 with explanation
1. Which of the following is true about the straight-line method?
A. Complex method
B. Cost of depreciation remains constant
C. Cost of depreciation changes every year
D. Profit and Loss account debited with different amount every year
2. Reduction in the book value of an asset over a period of time is called-
A. Appreciation
C. Proportion
B. Depreciation
D. Depletion
3. Which among the following is Not a reason for depreciation?
A. Use of asset
B. Obsolescence
4. It is the main object of providing depreciation.
A. To calculate true profit
C. Passage of time
D. Repair of an asset
C. To show true financial position
D. To provide funds for replacement
B. To reduce tax
5. Which is excluded in straight line method of depreciation?
A. Useful life of the asset
B. Cost of the asset
6. It refers to the estimated disposal value of an asset.
A. Use value
C. Annual cost of repair
D. Expected salvage value
C. Market value
B. Salvage value
D. Book value
7. It is an amount which a willing buyer will pay to a willing seller for the property where each has
equal advantage and is under no compulsion to buy or sell.
A. Use value
C. Market value
B. Salvage value
8. The amount that the property would give if sold for junk.
A. Junk value
C. Salvage value
D. Book value
B. Book value
D. Scrap value
9. A type of depreciation is due to the reduction of the physical ability of an equipment or asset to
produce results.
A. Physical depreciation
C. Functional depreciation
B. Design depreciation
D. Demand depreciation
10. It refers to the reduction in the demand for the function that the equipment or asset was designed
to render.
Transcribed Image Text:1. Which of the following is true about the straight-line method? A. Complex method B. Cost of depreciation remains constant C. Cost of depreciation changes every year D. Profit and Loss account debited with different amount every year 2. Reduction in the book value of an asset over a period of time is called- A. Appreciation C. Proportion B. Depreciation D. Depletion 3. Which among the following is Not a reason for depreciation? A. Use of asset B. Obsolescence 4. It is the main object of providing depreciation. A. To calculate true profit C. Passage of time D. Repair of an asset C. To show true financial position D. To provide funds for replacement B. To reduce tax 5. Which is excluded in straight line method of depreciation? A. Useful life of the asset B. Cost of the asset 6. It refers to the estimated disposal value of an asset. A. Use value C. Annual cost of repair D. Expected salvage value C. Market value B. Salvage value D. Book value 7. It is an amount which a willing buyer will pay to a willing seller for the property where each has equal advantage and is under no compulsion to buy or sell. A. Use value C. Market value B. Salvage value 8. The amount that the property would give if sold for junk. A. Junk value C. Salvage value D. Book value B. Book value D. Scrap value 9. A type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results. A. Physical depreciation C. Functional depreciation B. Design depreciation D. Demand depreciation 10. It refers to the reduction in the demand for the function that the equipment or asset was designed to render.
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