QUESTION 19 When a company decreases the estimated useful life of a PP&E asset O a. It is admitting it made a mistake and needs to correct the financial statements affected by this mistake. O b. It will recognize less total depreciation expense than it originally planned. O c. It must revise depreciation expense for future periods only. O d. It must disclose the change in estimate but depreciation expense will not change.

QUESTION 19 When a company decreases the estimated useful life of a PP&E asset O a. It is admitting it made a mistake and needs to correct the financial statements affected by this mistake. O b. It will recognize less total depreciation expense than it originally planned. O c. It must revise depreciation expense for future periods only. O d. It must disclose the change in estimate but depreciation expense will not change.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q 9.48: Prior to calculating the depreciation expense, what must a company estimate about the asset at the end of its useful life? Obsolescence Accumulated depreciation Depreciable cost AE Salvage value Qu D. Study th - Apply de plant asse O Mark for Review Confidence SUBMIT F5 F8 10 F6 AA F4 4. 8.
True or False: increasing the salvage value increases depreciation expense.FalseTrue or False: decreasing the useful life increases depreciation expense.True Why are the answers false and true? Please explain!
15 Under physical capital maintenance assumption, a profit is earned only if the physical operating capability of the entity at the end of the accounting period is _____________ its physical operating capability at the start of the period, after adjusting for any amounts contributed by or distributed to owners during the period. a. Equal to b. Less than c. None of the given options d. Greater than
12. How is the matching principle related to the recording of depreciation on tangible operational assets? A. The matching principle requires a company to use the same depreciation. B. Once a particular depreciation method is adopted for a particular asset, the owner must continue to use the same method. C. The accountant who calculates the depreciation may assume that the company will continue in business as long as the estimated useful life of the asset. D. A portion of the cost of the asset should be allocated as an expense for the periods in which the asset helps the business to earn revenue.
Please give right answers to both questions
9 - When identifying undervalued and overvalued assets, which of the statements below is false? An asset is properly valued if its estimated rate of return is equal to its required rate of return. An asset is considered overvalued if its estimated rate of return is below its required rate of return. An asset is considered undervalued if its estimated rate of return is above its required rate of return. An asset is considered overvalued if its required rate of return is below its estimated rate of return. All of the above answers are false. None of the above answers is false.
Which limitation of an income statement occurs when one company uses an accelerated depreciation method while another company uses straight-line depreciation? O Companies omit from the income statement items they cannot measure reliably. O Income measurement involves judgment. O Income numbers are affected by the accounting methods employed. All of these answer choices are correct.
True or false ________ 10. Depreciation is charged on all company’s assets. ________ 11. Depreciation is the part of the cost of the fixed asset consumed during the period of use by the firm. ________ 12. The cost of repairs is included in the calculation of depreciation of a fixed asset
Question 12 Costs that are capitalized: O Show up as an expense on the income statement without ever being recorded on the balance sheet O None of the possible choices O Will initially be recorded as an asset on the balance sheet O Never exist as part of accrual accounting
Time left 0:15:48 18 When accounting for self-constructed PPE and computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to t of O a. that portion of average accumulated expenditures on estion which no interest cost was incurred O b. a cost of capital charge for equity O c. that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made O d. the total interest cost actually incurred
While calculating operating profit which will not be added back to net profit a. Preliminary Expenses Written off b. Depreciation c. Loss on Sale of Asset d. Rent Expenses