Which of the following is a false statement about depreciation? It has no impact on cash It represents the physical deterioration of an asset It exists because of the matching principle Accelerated methods of calculating depreciation are acceptable under GAAP

Which of the following is a false statement about depreciation? It has no impact on cash It represents the physical deterioration of an asset It exists because of the matching principle Accelerated methods of calculating depreciation are acceptable under GAAP

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The book value of a depreciable asset is A. The original cost of the asset. B. The…

A: Book value of a depreciable asset means value at which that asset is shown in the balance sheet of…

Q: Which of the following is a not a true statement about depreciation? a. It is the allocation of cost…

A: The Depreciation expense is charged on fixed assets as reduction in the value of the fixed assets…

Q: 4. The most appropriate definition of depreciation is: A. A means of determining the decrease in the…

A: Introduction:- The following methods used to calculate depreciation as follows under:- Straight…

Q: Which of the following statements is true about assessing recoverability of property, plant and…

A: The objective of the question is to identify the correct statement about assessing the…

Q: 2. Which of the following statement is true? a. Existence and valuation assertions related to…

A: Existence and valuation assertions related to long-lived assets are most relevant assertions because…

Q: Which combination of depreciation methods and useful lives is most conservative in the year a…

A: According to the conservative approach, the depreciation expense will be reported higher and profit…

Q: Which of the following statements is true about assessing recoverability of property, plant and…

A: The objective of the question is to identify the correct statement about assessing the…

Q: It is the gradual diminution of the useful value of tangible property resulting from wear and tear…

A: (i) Depreciation: Depreciation is the gradual decrease in the value of the asset due to wear and…

Q: Indicate whether each of the following statements is true or false. An impairment loss is the…

A: 1. True, Impairment loss occurs when the asset suffers a depreciation in the Fair value(Expected…

Q: Which statement is INCORRECT about subsequent measurement of intangible assets? Q7 Select…

A: Intangible assets are identifiable non-monetary asset without any physical substance. An asset…

Q: What element must be present when determining if an asset is a depreciating asset? a. An asset…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. depreciating…

Q: Which of the following is not a factor that limits the service life of an asset? a. Operational use…

A: Service life can be limited due to physical causes and functional causes such as deterioration,…

Q: First cost Book depreciation life MACRS property class Salvage value n 1 2 3 4 5 6 7 8 A $8,000…

A: Depreciation is used to record expenses of asset over the life of asset. There are various methods…

Q: State which statement is true or false The declining-balance method does not deduct the residual…

A: The declining-balance method does not deduct the residual value in computing the depreciation…

Q: Compute the amount of property and equipment that United Presents wrote off as impaired during the…

A: Solution

Q: Which of the following is not a part of the impairment test of equipment under IFRS? Group of answer…

A: The objective of the question is to identify which of the given options is not a part of the…

Q: Access the FASB Accounting Standards Codification at the FASB website (asc.fasb.org). Determine the…

A: Depreciation: It refers to the reduction in the monetary value of fixed tangible assets over its…

Q: First cost Book depreciation life MACRS property class Salvage value n 1 2 3 4 5 6 7 8 A $8,000…

A: Depreciation: It is a method of charging the cost of the asset to the income statement each year.

Q: Why would a company choose to depreciate one piece of equipment using the double-declining-balance…

A: Depreciation is a decline in the value of the assets due to day-to-day working and wear and tear…

Q: Which of the following statements relating to intangible assets is true? A All intangible assets…

A: Intangible assets: These are the long-term assets which are not physical in nature, but possess…

Q: Discuss the implications of a misstated useful life of a category of capital equipment. What steps…

A: Prior period errors are the errors or omissions or misstatements that occur in one or more previous…

Q: Which of the following depreciation methods can NOT depreciate an asset below its salvage value?…

A: Solution: As per GAAP, asset can not be depreciated below its salvage value.

Q: Which of the following statements concerning Intangible assets are TRUE? (In your answer, provide…

A: A) Goodwill can never be recognised because it is not an identifiable resource. C) Intangible assets…

Q: The key difference between amortization and depreciation is that amortization charges off the cost…

A: In this question, we are required to determine the key difference between depreciation and…

Q: Why is depreciation expense recognized? Select one: a. To provide a better estimate of the market…

A: Depreciation expense is the systematic allocation of the cost of a long-term asset over its useful…

Q: Explain what complications might arise in trying to compare the results of straight-line…

A: Depreciation is defined as a reduction in the value of an asset that occurs over time as the assets…

Q: Which of the following statements is true regarding depreciation methods? a.The use of a declining…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: With regards to depreciation, which of the following is not true? Straight Line depreciation…

A: Depreciation is an accounting technique used to spread out the cost of a tangible item over its…

Q: What is the purpose of amortisation? To allocate the cost of an intangible non-current asset…

A: Amortization and Depreciation are both terminology used in finance

Q: Which of the following statements about depreciation is not true? A. Depreciation does not mirror…

A: The entity provides depreciation to recover the cost of the assets purchased. The companies also…

Q: In a replacement analysis, the market value of the currently owned asset a. does not impact the cash…

A: With the passage of the time, old assets are outdated and more cost is incurred to maintain. So, it…

Q: 1. For each of the following scenarios, indicate whether a long-term asset has been impaired (Y for…

A: When carrying value of fixed asset is more than the actual recoverable value of the asset, then…

Q: Which of the following statements is FALSE? Some intangible assets are not required to be amortized.…

A: Let's analyze each statement one by one:Statement 1: Some intangible assets are not required to be…

Question

Which of the following is a false statement about depreciation?

It has no impact on cash

It represents the physical deterioration of an asset

It exists because of the matching principle

Accelerated methods of calculating depreciation are acceptable under GAAP

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which statement concerning depreciation is false? a.The only property that has a determinable life is depreciable. B.Land is not depreciable. C.Intangible assets' capital costs are recovered through amortization, much like depreciation. D.Personal property converted to business use is not depreciable since it was once used for personal purposes.
IFRS: permits reversal of impairment losses when there has been a change in economic conditions. O requires expensing of all R&D costs. O permits revaluation for goodwill. O permits capitalization of all internally generated intangible assets.
Which of the following best describes depreciation?A It is a means of spreading the payment for the asset over its total estimated lifeB It represents the decline in the market value of the assetC It is a means of spreading the cost of an asset over its estimated useful lifeD It is a way of estimating the cash needed to replace the asset in the future
Which of the following statements are true about the revaluation model perIAS 16 Property, Plant and Equipment?1) Excess depreciation as a result of a revaluation exercise can betransferred between reserves2) Depreciation must be charged based on the historical cost of theasset3) All assets of the same class must be revalued4) Valuations must be independent and carried out regularly Which is correct ?a) 1, 3 and 4b) All of the abovec) 1 and 3d) 2, 3 and 4
Which of the following expenditures would be included in the cost of a fixed asset? Oa. Sales taxes Ob. Vandalism Oc. Uninsured theft Od. Mistakes in installation