Which of the following is a depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications? Multiple choice question. The declining balance method The modified accelerated cost recovery system The straight-line depreciation method The capital cost allowance method

Which of the following is a depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications? Multiple choice question. The declining balance method The modified accelerated cost recovery system The straight-line depreciation method The capital cost allowance method

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 9DQ

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With regards to depreciation, which of the following is not true? O Straight Line depreciation includes initial cost and salvage value in the depreciation calculation. In straight line depreciation, the depreciation life (n) is set based on the MACRS property class. MACRS Depreciation method is the only method allowed for accounting and tax purposes. In MACRS depreciation, the salvage value is assumed to be zero. In straight line depreciation, the asset is depreciated down to a book value equal to the salvage value.
What would be the tax treatment of a superficial loss? a. Permanently denied. b. Immediately deductible. c. Deducted from the adjusted cost base (ACB) of the reacquired property. d. Added to the ACB of the reacquired property for the purposes of determining the future capital gain or loss when the property was sold.
Match the concept that closely describes a particular depreciation method. Choose the correct answer lowers the tax liability a) double-declining balance method b) units-of-production method c) straight-line method more closely matches the expense with the benefit of the asset a) double-declining balance method b) units-of-production method c) straight-line method most commonly used method a) double-declining balance method b) units-of-production method c) straight-line method
Which one of the following statements is not true regarding depreciation? a. It is a systematic, rational method of allocating the cost of an asset over its useful life b. It attempts to match the costs of acquiring an asset to the benefits to bederived from the asset c. It does not attempt to measure the value of the asset d. It provides funds for the replacement of the asset through tax savings over the asset's life
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Why is depreciation added to Net CAPEX? A To adjust CAPEX for taxable income B To isolate changes due to buying or selling of CAPEX с To reflect the economic value of the fixed assets
Which of these statements about depreciation is true? a. MACRS depreciation incorporates only declining balance depreciation in itscomputations for all assets.b. Straight line depreciation is actually not straight at all, but is based on anexponential decay function.c. For twenty-first century assets in the U.S., MACRS depreciation and taxdepreciation have the same meaning.d. Gains tax is paid on any revenue that exceeds the year's depreciation allowance.
Explain what is meant by an accelerated depreciationmethod. Are accelerated methods more widely used infinancial statements or in income tax returns? Explain.
32. Under MACRS, which one of the following is not considered in determining depreciation for tax purposes? A) Half-year convention B) Cost of asset C) Salvage value D) Property class
What is the proper term for depreciation methods used for tax purposes? Provide the acronym and the full name. What was the term for the method used before the current method?
What costs are capitalized, or added to the asset account when acquiring property and equipment? A. Only the ticketed list price of the asset purchased. B. Any cost that is considered normal and necessary to get the asset into position and condition to be used. C. The lower of cost or net realizable value. D. Any of the above are allowed by U.S. GAAP as the cost to capitalize when acquiring property and equipment.
Which of the following refers to the similarity between the U.S. GAAP and IFRS regarding accounting for Long-Lived Assets? Depreciation is based on the fair value of assets. An impairment loss occurs if the carrying value exceeds the recoverable amount, defined as the higher of the asset’s fair value (less costs to sell) and its value in use, which is the discounted net cash flows. For the purposes of determination which expenses may be capitalized, Research and Development expenditures are treated differently. Intangible assets are acquired at amortized cost.