Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets? Question 21 options: Salvage value Estimated useful life Cash needed to replace the plant asset Cost

Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets? Question 21 options: Salvage value Estimated useful life Cash needed to replace the plant asset Cost

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: Conceptual Question Identify whether or not each of the following items should be capitalized as…

Q: For depreciation purposes, what would be the first cost of the new machine(depreciation base)?

A: Depreciation is the charge or expense to be accounted in the books against an asset of the…

Q: The cost of the plant assets consists of Select one: O a. All expenditures necessary to sell an…

A: A resource which can be controlled by an entity for future economic benefit Is called an asset.

Q: Which of the following depreciation methods initially ignores salvage value in its calculation?…

A: Depreciation is a way of declining the cost of assets over the useful life of assets, the company…

Q: Which of the following doesn't represent depreciation Select one: O a. It is the process of…

A: Depreciation is an accounting method that allows a company to write off an asset's value over a…

Q: Costs incurred internally to create intangibles are required to be a. expensed as incurred b.…

A: Intangible Assets: An intangible asset is a kind of asset that does not have a physical…

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: Impairment of a long-term operating asset occurs when ________. Group of answer choices an asset or…

A: The objective of the question is to identify the correct scenario under which the impairment of a…

Q: Estimates of an asset's salvage value and usable life are used to determine depreciation costs. Is…

A: Different methods of depreciation are based on the useful life of the asset. However, one of the…

Q: What is the systematic periodic transfer of the cost of a fixed asset to an expense account during…

A: It is a measure of the wearing out, consumption or other loss of value of depreciable asset arising…

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: Statement 1: If there is an indication of impairment, it means that the remaining useful life, the…

A: Impairment refers to the reduction in value of asset due to the change in working condition of…

Q: Which depreciation method ignores residual value until the last year of depreciation? Why?

A: Double declining method of depreciation does not consider residual value while calculating…

Q: Which of the following is NOT a method commonly used to determine the residual value of a property?

A: 1.d) Hire an appraiser to perform a forward-looking appraisal of the property This is not an…

Q: In the summation (cost) method of valuation, which of the following steps is the ONLY one that a…

A: The summation method of valuation or cost method of valuation is the technique that is used to make…

Q: The cost of fixed assets is distributed over the asset's estimated lifetime. This spreading of costs…

A: Fixed Asset: It is a long-term asset and is tangible in nature. Such assets are used by the firm to…

Q: Which of the following research and development costs should always be capitalized? a. costs of…

A: Research and development costs can be defined as the efforts of the company that are related to the…

Q: 1. Distinguish among depreciation, depletion and amortization. 2. Identify the factors that are…

A: Depreciation: It applies to tangible assets like buildings and machinery. It reflects the gradual…

Q: What is the nature of the recoverability test for indefinite-life intangible assets? Group of answer…

A: The question is asking about the nature of the recoverability test for indefinite-life intangible…

Q: In recording amortization of intangible asset, why isn't there an entry such as a credit to…

A: The objective of the question is to understand why the accounting treatment for amortization of…

Q: Choice Are revenue expenditures.

A: Extraordinary repairs are repairs that are of high cost and increase the useful life of the asset…

Q: The cost of an item, an estimate of its salvage value, and an expected usable life are all factors…

A: The Answer

Q: Determine the initial cost of property, plant, and equipment and intangible assets acquired in…

A: Property, Plant, and Equipment or PP&E is a classification shown on a balance sheet. It normally…

Q: Depreciation Concepts Listed below are concepts and terminology related to depreciation. Required:…

A: Solution:- Matching the each concept with the related terminology as follows:-

Q: What is the appropriate depreciation time for a new long-lived asset added to an existing one?…

A: Depreciation refers to the concept of evaluating the decrease in the value of an asset that occurs…

Q: An intangible asset with a finite useful life should be amortized over:

A: INTRODUCTION Intangible Asset: Any financial or non-financial item that cannot be physically…

Q: Companies that acquire intangible assets under IFRS may only utilize the revaluation model if the…

A: Here is the answer :

Q: In computing depreciation, salvage value is

A: Answer: Option d

Q: 32 Which of the following information is necessary to apply the straight-line method of depreciation…

A: Depreciation is used to record reduction in value of asset over the period of time. It can be…

Q: Why does the depreciation included in computing the annual cost of annual worth method but not in…

A: Depreciation is a separate provision for fixed assets. Fixed amount is charged out of profit during…

Q: Of the following costs related to the development of mi one is not a part of depletion cost?

A: Deplation Cost One of two accounting systems for allocating the costs of extracting natural…

Q: Which one of the following statements is true? If the activity method is in use, residual value…

A: Lets understand the basics. In activity based costing, depreciation is calculated based on the…

Q: A plant asset's book value equals its estimated salvage value: A. On the date of the asset's…

A: Depreciation on a depreciable asset is computed after considering its salvage value so that at the…

Q: The depreciation method that produces larger depreciation expense during the early years of an…

A: Any depreciation technique that allows for the recording of larger depreciation expenditures in…

Q: The book value of a plant asset is equal to Select one: the fair value of the asset at the…

A: The book value of a plant asset is a term used in accounting to describe the net value of an asset.…

Q: A gain or loss on disposal of a plant asset is determined by comparin O replacement cost of the…

A: In the business world, the term "book value" was coined to indicate the current value of a…

Q: Define Market Value? A. The combined cost of purchase and installation of an asset can be…

A: Market Value in general refers to the market capitalisation of a company which can be calculated by…

Q: When a number of low-cost depreciable assets with similar characteristics, service lives, and…

A: Group depreciation refers to that method of charging depreciation where the assets having similar…

Q: Evaluate the following statements: S1. When buildings and improvements are constructed in connection…

A: Depreciation is the charge on assets for the usage of assets during the period. Extracting natural…

Q: The balance in the Accumulated Depreciatin account represents: A) The amount charged to expense in…

A: Assets are depreciated by companies and this allows the company to recover the cost of the asset…

Q: All amounts paid to acquire a long lived-asset and to get it ready for its intended use are referred…

A: Long lived assets are things that are owned by the company for an elongated period and are also…

Q: Expenditure on existing property, plant and equipment may be capitalized (recognized as an increase…

A: The answer for the multiple choice question and relevant explanation are presented hereunder : Any…

Q: Which of the following items is not a consideration when recording periodic depreciation on plant…

A: In order to record the periodic depreciation on Plant Assets Cost, Salvage value and Estimated…

Q: Which of the following costs is not typically capitalized as part of an asset’s cost? A) initial…

A: Introduction:- Capitalized cost of asset consists of acquisition cost of asset and other costs are…

Question

Which one of the following items is not a consideration when recording periodic depreciation expense on plant assets?

Question 21 options:

	Salvage value
	Estimated useful life
	Cash needed to replace the plant asset
	Cost

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.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

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

question 23 choose the correct answer from the choices
Which method of deprecaution is used when the cost of an asset is written off in equal amounts over its expected economic life? A fixed instalment B accelerated C sum of the digits D diminishing balance
A gain or loss on the sale of a plant asset is determined by comparing the: A. Asset's original cost with the sales proceeds B. Asset's book value with the sales proceeds C. Asset's original cost with the asset's book value. D. Initial estimate of the asset's salvage value with the sales proceeds. E. None of these.
Which of the following are includable to the cost of property and equipment? Transportation costs on machinery purchased under terms FOB shipping point Interest on loans borrowed to purchase an equipment Installation costs and cost of trial runs of a machinery Repairs on broken glass windows of a purchased buildings prior to occupancy
Trinkle Company made several purchases of long-term assets during the year. The details of each purchase are presented here. New Office Equipment 1. List price: $42,600; terms: 2/10, n/30; paid within the discount period. 2. Transportation-in: $880. 3. Installation: $400. 4. Cost to repair damage during unloading: $630. 5. Routine maintenance cost after eight months: $150. Basket Purchase of Copier, Computer, and Scanner for $52,500 with Fair Market Values 1. Copier, $23,421. 2. Computer, $12,027. 3. Scanner, $27,852. Land for New Warehouse with an Old Building Torn Down 1. Purchase price, $83,800. 2. Demolition of building, $4,760. 3. Lumber sold from old building, $1,780. 4. Grading in preparation for new building, $7,900. 5. Construction of new building, $279,000.
When considering the replacement of old equipment, which of the following ?item is relevant original cost of old equipment O accumulated depreciation on old equipment O future maintenance costs of old equipment book value of old equipment O loss on disposal of old equipment O
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.
The undiscounted future net cash flow is used as a benchmark to determine any impairment loss on which of the following types of intangible assets? O Limited life intangibles. O Indefinite life intangibles other than goodwill. O Goodwill. O Indefinite life intangibles.
Allocating the cost of a natural resource to the units removed is called amortization. True False 2.Costs incurred to acquire long-lived assets are capital expenditures. True False 3.Accumulated depreciation, as used in accounting, may be defined as: o An expense of doing business. o Funds (or cash) set aside to replace the asset being depreciated. o portion of the cost of plant asset recognized as expense since asset was acquired. o Earnings retained in the business.4. On January 1, 1999, Ubot Inc. purchased a piece of equipment for $60,000. It is estimated to have an economic life of 5 years and a salvage value of $10,000. The 200% declining-balance method for depreciation is used. What is the book value of the asset at the end of year 2000 ? A. o $24,000 B. o $40,000 C. o $36,000 D. o $21,600 5.It is not necessary to disclose the maturity dates of long-term obligations on the financial statements. True False 6.The…
When calculating depreciation expense using the straight line method, useful life is expressed as time dollars Units expected to be produced salvage value Next *
The write-off of the cost of plant and equipment is called a.amortization. b.depletion. c.depreciation. d.deterioration
Which of the following methods is used to amortize intangible assets over their useful lives? a. a declining balance methodb. straight linec. annual review for impairmentd. intangible assets are not amortized