Answered: true or false If an uninsured asset is…

true or false If an uninsured asset is destroyed by fire, the firm suffers a loss measured by the asset's estimated salvage value

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity

Section: Chapter Questions

Problem 7CYBK

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Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

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When a destroyed business asset is replaced, which of the following is true? a. The excess replacement cost over the carrying value of the destroyed asset is capitalized. b. The replacement cost is capitalized and the carrying value is deductible as loss. c. The replacement cost is capitalized and the carrying value is disregarded. d. Answer not given
True or false If you sell an asset for more than its salvage value you can record a loss for the difference?
What element must be present when determining if an asset is a depreciating asset? a. An asset that holds its value for a period of time or increases in value for a period. b. An asset that has a limited effective life. c. A fixture that completely loses its value. d. An asset that cannot reasonably be expected to decline in value over time.
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.
Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.
TRUE OR FALSE? Once decided by management as an asset held for sale, management can never change its decision to revert back an asset as part of property, plant and equipment.
Which of the following statements is FALSE? ◇ If an improvement or replacement is made and the carrying value of the asset that is removed is not known and the assets useful life is extended, accumulated depreciation should be debited for the cost of the improvement/replacement. O If the orginial cost of an installation is not known, and the rearrangement/reinstallataion cost is material in amount and benefits future periods, the cost should be capitalized as an asset A major repair should be treated as an addition, improvement or replacement. All of the above are truc
It is the expected selling price of a property when the asset can no longer be used by its owner. procurement value discharge value O purchase value salvage value
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.
Why must we have an entry to remove fully depreciated fixed assets (no salvage value) from the books if there is no profit or loss on the disposal?
TRUE OR FALSE If an intangible asset is successfully defended from a legal challenge, the incurred legal costs are capitalized to the asset account.
A loss on disposal occurs when:A a depreciable asset is sold for less than its undepreciated balance at the time of sale, and less than its purchase price B depreciable asset is sold for more than its undepreciated balance at the time of sale, but less than its purchase price C a depreciable asset is sold for more than its undepreciated balance at the time of sale, and more than its purchase price