The costs for environmental clean-up at the end of an asset’s useful life (under ASPE) Select one: a. include only costs related to the acquisition of the asset. b. are recognized only if they represent a legal obligation. c. are capitalized once they have become apparent. d. are always expensed as incurred.

The costs for environmental clean-up at the end of an asset’s useful life (under ASPE) Select one: a. include only costs related to the acquisition of the asset. b. are recognized only if they represent a legal obligation. c. are capitalized once they have become apparent. d. are always expensed as incurred.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 4DQ

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Similar questions

Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers to the process of converting assets to expenses. B. Only the purchase price of the asset is capitalized. C. Capitalizing a cost means to record it as an asset. D. Capitalizing costs results in an immediate decrease in net income.
What is a relevant cost? Explain why depreciation on an existing asset is always irrelevant.
In which of the following situations would a cost incurred after an asset’s acquisition be capitalized? A.The useful life of the asset is increased. B.The amount of the expenditure must be immaterial. C.The expenditure is necessary to maintain the working order of the asset. D.There is no increase in the useful life of an asset.
What is the effective life of an asset? a. The total period of ownership of the asset, including when it is not installed and ready for use.. b. The period prior to the asset being abandoned or scrapped. c. The period that the asset can be used for income-producing purposes. d. All of the above.
3) Which of the following best describes a depreciation base?7) The acquisition cost of an asset relative to its fair value O The estimated market value of an asset at the end of its useful life O The historical cost of an asset less the depreciation recognized to date O The amount that should be expensed over an asset's useful life
What is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its life
TRUE OR FALSE The term used to describe the mechanical process of allocating the cost of an intangible asset to expense over the shorter of the legal life or estimated useful life is called amortization.
Which 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.
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.
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 asset
The book value of a depreciable asset is A. The original cost of the asset. B. The original cost of the asset less its accumulated depreciation. C. The original cost of the asset less its salvage value. D. The accumulated depreciation on the asset. E. None of these.
1. For each of the following scenarios, indicate whether a long-term asset has been impaired (Y for yes and N for no) and, if so, the amount of the loss that should be recorded. Prepare any necessary journal entry. Do you have to subtract the carrying amount and value in use amounts for each? For the journal entries, I don't understand which journal entries you have to do, can you please explain, thank you.