Which of the following statements is FALSE?◇ If an improvement or replacement is made and the carrying value of the asset that isremoved is not known and the assets useful life is extended, accumulateddepreciation should be debited for the cost of the improvement/replacement.O If the orginial cost of an installation is not known, and therearrangement/reinstallataion cost is material in amount and benefits future periods,the cost should be capitalized as an assetA major repair should be treated as an addition, improvement or replacement.All of the above are truc

The first statement is true. When an improvement or replacement is made and the carrying value of…

Answered: Which of the following statements is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

What serious consequences occur in an inaccurate estimate of asset needs?
The difference between the purchase cost of an asset and its value at the end of the life is known as a. Residual value b. Scrap Value c. Depreciable cost d. Amortization cost
Depreciation is the allocation of the cost of a plant asset over its useful life in a rational and systematic manner. The asset being depreciated remains at historical cost and the accumulated depreciation account serves as a contra account to lower the asset balance on the books. Question: Explain why this lowered value is, or is not, the market value of the asset in any given accounting period. Support your answer with examples explaining your choice.
Once an asset has been determined to be impaired, the amount of impairment is measured as: The asset's cost minus the fair value The asset's future cash inflows minus the book value The asset's book value minus the fair value The asset's cost minus the book value
True or False: increasing the salvage value increases depreciation expense.FalseTrue or False: decreasing the useful life increases depreciation expense.True Why are the answers false and true? Please explain!
in calculating an impairment loss, which TWO of the following are correct? Assets should be carried at the higher of their carrying amount and recoverable amount Recoverable amount is the higher of value in use and fair value less costs of disposal Recoverable amount is the lower of value in use and fair value less costs of disposal Assets should be carried at the lower of their carrying amount and recoverable amount
The impairment test for goodwill is conducted based on the cash-generating unit to which the goodwill has been assigned. After an impairment loss is recorded for goodwill, the recoverable amount becomes the basis for the impaired asset and is used to calculate amortization in future periods. options : both statement false first statement true and second statement false fisrt statement false and second statement ttrue . both sttament true
Which of the following statements is the assumption on which straight line depreciation is based? Service value declines as a function of time rather than use Physical wear and tear are more important than economic obsolescence Service value declines as function of obsolescence rather than time The operating efficiency of the asset decrease in later years
Which statement regarding depreciation is incorrect? * Depreciation of noncurrent operating assets is an accounting process for the purpose of allocating asset costs over the periods benefited by use of the assets Service value declines as a function of time rather than use, is the assumption on which straight-line depreciation is based The composite depreciation method does not recognize gain or loss on the retirement of specific assets in the group. The double-declining-balance method ignores salvage value in calculating periodic depreciation expense. none of the above
From an economic point of view, which activity is regarded as an undertaking to prevent a loss in value, rather than an activity undertaken to add value to the property? maintenance O modernization O rehabilitation O remodeling
1. It is a depreciation method based on the assumption that the value of a property is directly proportional to its age. a. Straight Line Method b. Sinking Fund Method c. Declining Balance Method d. Service Output Method 2. Which of the following is NOT a requirement of a depreciation method? a. It should be simple b. It should recover the capital c. BIR approved d. The book value should be higher than the market value 3. The decrease in the purchasing power of money a. Devaluation b. Depreciation c. Inflation d. Depletion
A long-term asset that is retired from operations and held for disposal or sale is valued at ________. Group of answer choices value in use replacement cost lower of cost or market lower of carrying value or net realizable value

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