True or False 1) Depreciation, depletion, and amortization all involve the allocation of the cost of property, plant and equipment (PPE) to expense 2) The declining-balance method does not deduct the residual value in computing the depreciation base 3) In a multiple-deliverable arrangement, once the separate units of accounting are determined, the amount paid for the arrangement is allocated among the separate units based on relative fair value.
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.
True or False
1)
2) The declining-balance method does not deduct the residual value in computing the depreciation base
3) In a multiple-deliverable arrangement, once the separate units of accounting are determined, the amount paid for the arrangement is allocated among the separate units based on relative fair value.
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