Statement 1: The cost of an asset, or other amount substituted for cost, less its residual value is called “depreciation”. Statement 2: And, “depreciation” on the other hand, is the systematic allocation of theamount of depreciation of an asset over its useful life.   a. Statement 1 is correct b. Statement 2 is correct c. Both statements are correct d. Both statements are wrong

Q: The book value of a depreciable asset is       A. The original cost of the asset.       B. The…

A: Book value of a depreciable asset means value at which that asset is shown in the balance sheet of…

Q: practice, would you expect the depreciation expense for a non-current asset to be overestimated or…

A: Depreciation is charged for non current asset being tangible asset, because of its wearing and tear…

Q: An asset's book value or carrying value is its: Multiple Choice O accumulated depreciation. cost…

A: The book value or carrying value of the machine is the value that carries on the balance sheet of…

Q: The adjusted basis of an asset is the original cost (or basis) plus capital recoveries less capital…

A: Adjusted basis: The amount of original cost, plus additional investments (capital expenditure) and…

Q: Depreciation is ........of cost of fixed assets (a) Apportionment (b) Allocation (c) Expenses (d)…

A: Depreciation is the decrement in the value of tangible assets by the wear and tear during the…

Q: The book value of an asset is equal to the     asset's cost less accumulated depreciation.…

A: Book value means the value as per books of accounts. The assets are generally recorded at cost less…

Q: which metric is used as the profitability metric and explain what it evaluate?

A: Profitability Matric is somewhere helps to analyse the financial performance and financial position…

Q: Allowable depreciation reduces the basis of an asset whether the depreciation is deducted or not.

A: Allowable depreciation is the depreciation of the asset which is must allowed to deduct from the tax…

Q: Depreciation does not measure the decline in market value of an asset each period. True False

A: Depreciation is a financial method used to allocate cost of a tangible asset like land or building…

Q: What element must be present when determining if an asset is a depreciating asset?   a. An asset…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. depreciating…

Q: Given the dual effects of accountable events, an decrease in an asset cannot possibly be accompanied…

A: Assets = Liabilities + Stockholders equity Every transaction has dual effect .  The question is…

Q: Which of the following is not a factor that limits the service life of an asset? a. Operational use…

A: Service life can be limited due to physical causes and functional causes such as deterioration,…

Q: ts) Which principle has FASB used to determine the accounting method for recordin elopment costs? 4…

A: There are specific methods of accounting for different activities and there is specific method of…

Q: An SME does not need to estimate the residual value of its depreciable assets when computing for…

A: Small and medium sized firms are those firms which have the less number of employees in it, less…

Q: Why is the cost of certain kinds of property not recoverable at all by way of de-preciation,…

A: Cost of some assets are not recoverable because of the main reason that these assets do not qualify…

Q: The following terms are mismatched with its definitions. Match the terms to its correct definitions.…

A: The terms are matched with the definitions in below table:

Q: True or False: In accounting, depreciation represents the decrease in a long-term tangible asset’s…

A: A method of accounting known as depreciation spreads out the cost of an item over the period of that…

Q: Question 1 Which of the following is not correct in relation to the reversal of an impairment loss…

A: Step 1 Impairment of the assets means the downward revaluation of the assets; whenever the carrying…

Q: When identifying undervalued and overvalued assets, which of the following statements is least…

A: While identifying whether the assets are undervalued or over valued, the required rate of return as…

Q: The modified internal rate of return (MRR) test is designed to address a limitation associated…

A: The question is asking about the limitation of the internal rate of return (IRR) that the modified…

Q: An impairment loss is recorded when capital asset's   1. net book value is higher than the amount it…

A: Impairment loss is excess of carrying amount of assets over its recoverable amount .  Recoverable…

Q: Impairment loss is a situation when Select one: a. Carrying amount of an asset is greater than…

A: The greater of the following two values are the recoverable amount of an asset: Fair value minus…

Q: Depreciation is a valuation process that results in the report-ing of the fair value of the asset.”…

A: Depreciation is a form of non-cash expenditure which represents the normal wear & tear and…

Q: (Multiple Choice Question) Amortizable Cost refers to   1. An asset's Net Book Value minus its…

A: Amortizable cost refers to that cost of a fixed asset which has to be charged as an expense either…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.