The cost of a major addition to a long-lived asset should be recorded as an asset and depreciated over its useful life. True or False True False
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- What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.The factors used to compute depreciation expense are an asset's: O Cost, residual value, and service life. O Cost, residual value, and physical life. O Cost, replacement value, and service life. O Fair value, residual value, and economic life.The cost of an asset that is subject to depreciation is called a.depreciable cost. b.trade-in value. c.salvage value. d.revenue.
- In calculating depreciation, both the long-lived asset's cost and useful life are based on estimates. Select one: O True O FalseDepreciation expense is calculated using its cost, estimates of an asset's salvage value, and an estimated useful life. True or False?Name depreciation methods that deduct residual value before an asset is depreciated.
- The cost of an asset that is subject to depreciation os called?An estimate of how an asset will be used up over its useful life is known as what? a. Depreciation rate b. Impairment value c. Useful life d. Salvage valueOver what period should an addition to an existing long-lived asset be depreciated?Explain.
- Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable assetWhich of the following statements if not true? a. Depreciation is the process of allocating the purchase price of an asset minues its residual value to expense, for each period benefited by the asset. b. The cost of an asset includes all acquisition costs necessary to obtain the benefits to be derived from the asset. c. The service life of an asset is the measure of the number of years of service expected from the asset before its disposal. d. The residual value of an asset is the difference between the expected book value of the asset at the end of its service and the cost of disposal.We normally record a long-term asset at the a. Cost of the asset only.b. Cost of the asset plus all costs necessary to get the asset ready for use.c. Appraised value.d. Cost of the asset, but subsequently adjust it up or down to appraised value.
