INTERMEDIATE ACCOUNTING-MYLAB W/ETEXT
3rd Edition
ISBN: 9780136946601
Author: GORDON
Publisher: PEARSON
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Chapter 21, Problem 21.1BE
To determine
The type of change as well as the accounting treatment of several events.
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What is the systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life called (also thought of as the decline in usefulness of the fixed asset over time)?
Group of answer choices
fixing
costing
amortization
depreciation
An estimate of a plant asset's value at the end of its useful life, is knowing as.
Select one:
a. Book value
O b. Residual value
O c Depreciable cost
O d Cost
1
Select the best answer for the question.
11. What is the process by which the cost of a fixed asset over its estimated useful life is periodically charged to an expense a
O A. Hypothecation
B. Accretion
C. Liquidation
D. Depreciation
O Mark for review (Will be highlighted on the review page)
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O
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Fu
Chapter 21 Solutions
INTERMEDIATE ACCOUNTING-MYLAB W/ETEXT
Ch. 21 - Are accounting changes permitted in financial...Ch. 21 - How do firms report accounting changes under the...Ch. 21 - Prob. 21.3QCh. 21 - How do firms account for changes in accounting...Ch. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 21 - Prob. 21.8QCh. 21 - Do accounting errors that self-correct within two...Ch. 21 - Does a firm need to correct an error that...
Ch. 21 - Prob. 21.1MCCh. 21 - Prob. 21.2MCCh. 21 - Prob. 21.3MCCh. 21 - Prob. 21.4MCCh. 21 - Prob. 21.5MCCh. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Change in Accounting Principle, Long-Term...Ch. 21 - Prob. 21.6BECh. 21 - Prob. 21.7BECh. 21 - Prob. 21.8BECh. 21 - Prob. 21.9BECh. 21 - Prob. 21.10BECh. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Prob. 21.13BECh. 21 - Prob. 21.14BECh. 21 - Prob. 21.1ECh. 21 - Prob. 21.2ECh. 21 - Prob. 21.3ECh. 21 - Prob. 21.4ECh. 21 - Prob. 21.5ECh. 21 - Prob. 21.6ECh. 21 - Error Analysis and Correction. Feinstein and...Ch. 21 - Prob. 21.8ECh. 21 - Prob. 21.9ECh. 21 - Prob. 21.10ECh. 21 - Prob. 21.1PCh. 21 - Prob. 21.2PCh. 21 - Prob. 21.3PCh. 21 - Prob. 21.4PCh. 21 - Prob. 21.5PCh. 21 - Prob. 21.6PCh. 21 - Prob. 21.7PCh. 21 - Cases Judgment Case Judgment Case: Materiality and...Ch. 21 - Prob. 1FSCCh. 21 - Surfing the Standards: Change in Accounting...Ch. 21 - Prob. 1BCC
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Similar questions
- Depreciation of a plant asset is the process of ________. A. asset valuation for statement of financial position purposes B. allocation of the assets cost to the periods of use C. fund accumulation for the replacement of the asset D. asset valuation based on current replacement cost dataarrow_forwardDepreciation 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.arrow_forwardFor accounting purposes, depreciation refers to the process of ________. A. estimating an asset's current market value B. allocating the cost of a plant asset to expense over its useful life C. recording the decline in the market value of an asset to its book value D. determining the selling price of an assetarrow_forward
- What is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its lifearrow_forwardWhich of the following accounting policies is an example of costs versus benefits constraint being exercised in the disclosure of financial information? Inventory is valued at lower of cost or market. Property, plant and equipment are appraised and revalued every three years. Biological assets are stated at fair value unless the fair value cannot be measured reliably. Research and development costs are expensed as incurred.arrow_forwardA depreciation method that charges a varying amount to expense for each period of an asset's useful life depending on its usage. An expenditure to make a plant asset more efficient or productive. 2 An expenditure reported on the current income statement as an expense because it does not provide a material benefit in future periods. 10 A revision in a financial statement amount that results from new 1. Depletion 2. Betterment information, subsequent developments, better insight, or improved judgment. 3. Units of Production 4. Intangible Assets A method that yields larger depreciation expense during the early years of an asset's life and smaller expense in the later years. 5. Ordinary Repair 6. Accelerated Depreciation 7. Change in Accounting Estimate An expenditure made to keep a plant asset in normal, good operating 8. Goodwill condition. 9. Total Asset Turnover The process of allocating 10. Revenue Expenditure the cost of natural resources to periods when they are consumed. The amount…arrow_forward
- Revising an estimate of the useful life or salvage value of a plant asset is referred to as a change in accounting estimate and only affects current and future financial statements. true or falsearrow_forwardExplain the reasons for the impairment and the justification for treating the write-down as a permanent decline in value of the asset(s). A difference between the book value of plant assets and the fair value generally exists.Explain the role technology and obsolescence have in the impairment of assets.arrow_forwardWhich one of the following items is not a consideration when recording periodic depreciation expense on plant assets? a. Salvage value b. Estimated useful life c. Cash needed to replace the plant asset d. Costarrow_forward
- The allocation of the cost of a tangible asset to expense in the periods in which the asset is used is termed as: Select one: a. Depreciation b. None of the given options c. Appreciation d. Fluctuationarrow_forwardWhich of the following statements regarding the accounting treatment of agriculture is true? Question 25 options: a) Each biological asset must be measured individually under IFRS. b) Once agricultural produce is harvested and is initially measured, it becomes property, plant, and equipment accounted for under IAS 16. c) Under ASPE, a new standard specific to agriculture is effective for fiscal periods beginning on or after January 1, 2022. d) When measuring biological assets or agricultural produce under IFRS, fair value is considered the fair value when the asset is ready to be sold, not in its current condition.arrow_forwardDescribe the different methods available for recording depreciation on plant assets. Recommend the approach that you feel would be most advantageous for your selected company and explain why. Discuss the process for reporting contingent liabilities in the financial statements. Provide two examples of contingent liabilities that you might expect to see on your selected company’s balance sheetarrow_forward
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