When the unit of production method of depreciation is used, which of the following best describes depreciation expense? Select one: a. Depreciation expense will vary directly with output. b. Depreciation rate per unit will vary directly with output. c. Depreciation expense will vary directly with sales. d. Depreciation rate per unit will vary directly with sales.

When the unit of production method of depreciation is used, which of the following best describes depreciation expense? Select one: a. Depreciation expense will vary directly with output. b. Depreciation rate per unit will vary directly with output. c. Depreciation expense will vary directly with sales. d. Depreciation rate per unit will vary directly with sales.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter5: Adjusting Entries And The Work Sheet

Section: Chapter Questions

Problem 2MC

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The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is Select one: a. none of these. b. straight-line. c. declining-balance. d. units-of-activity.
For the composite method, the composite a. rate is the total cost divided by the total annual depreciation. b. rate is the total annual depreciation divided by the total depreciable cost. c. life is the total cost divided by the total annual depreciation. d. life is the total depreciable cost divided by the total annual depreciation.
Which of the following is true? a.If using the units-of-output method, it is possible to depreciate more than the depreciable cost. b.If using the double-declining-balance method, the total amount of depreciation expense during the life of the asset will be the highest. c.If using the straight-line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance. d.Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.
Contrast the effects of the straight-line, declining-balance, and activity-based methods on annual depreciation expense.
Analyze the impact of depreciation methods (straight-line, declining balance, and units of production) on financial statements. Discuss how each method affects asset valuation, expense recognition, and profitability. Depreciation methods impact the financial statements by affecting the valuation of assets and the recognition of expenses. Explain the straight-line method, where depreciation expense is evenly spread over the asset's useful life. Describe the declining balance method, which accelerates depreciation in the early years of the asset's life. Discuss the units of production method, which ties depreciation to actual usage or output. Analyze how each method influences asset valuation on the balance sheet, expense recognition on the income statement, and overall profitability.
Residual value is: A. Also called residual value.B. Also called scrap value.C. An estimate of the asset's value at the end of its benefit period.D. A factor relevant to determining depreciation.E. All of these.
For income statement purposes, depreciation is a variable expense if the depreciation method used is ☐ a. straight-line. ○ b. sum-of-the-years'-digits. ○ c. units-of-production. d. declining-balance.
21. The activity method of depreciation A) conceptually associates cost in terms of input measures. B) is a variable charge approach. C) assumes that depreciation is a function of the passage of time. D) all of these answers are correct.
When moving from the low end to the high end of the relevant range, straight-line depreciation expense per unit decreases. Could somebody explain why?
Write the fraction obtained from the straight-line depreciation rate?
The depreciation method which uses a depreciation rate that is a multiple of the straight-line rate is called: Multiple Choice Units-of-production depreciation. Modified accelerated cost recovery system (MACRS) depreciation. Declining-balance depreciation. Book value depreciation. Amortization.
Which of the following depreciation methods will result in the most depreciation expense over the life of an asset? Select one: a. Double-declining balance method b. All three methods will result in the same amount of depreciation expense. c. Units-of-production method d. Straight-line method e. Cannot be determined from the information given.