______21. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use. ____ 22. An estimate of the amount which an asset can be sold at the end of its useful life is called residual value. ____ 23. Federal unemployment taxes are paid by the employer and the employee.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
______21. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use.
____ 22. An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.
____ 23. Federal
____ 24. When minor errors occur in the estimates used in the determination of depreciation, the amounts recorded for depreciation expense in the past should be corrected.
____ 25. Residual value is not relevant when calculating the annual depreciation expense using the double declining-balance method (do not consider the calculation for the final year).
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