College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Textbook Question
Chapter 5, Problem 1MC
LO1 The purpose of
- (a) spread the cost of an asset over its useful life.
- (b) show the current market value of an asset.
- (c) set up a reserve fund to purchase a new asset.
- (d) expense the asset in the year it was purchased.
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4. The most appropriate definition of depreciation is:
A. A means of determining the decrease in the market value of an asset over
time
B. A means of allocating the cost of an asset over a number of accounting
periods
C. A means of setting funds aside for the replacement of the asset
D. A means of estimating the current value of the asset
The purpose of the depreciation adjustment is to:
-spread the cost invested in an asset over its useful life.
-show the current market value of the asset.
-set up a reserve fund for purchasing a new asset.
-expense the full amount of the asset in the year purchased.
3) Which of the following best describes a depreciation base?7)
The acquisition cost of an asset relative to its fair value
O The estimated market value of an asset at the end of its useful life
O The historical cost of an asset less the depreciation recognized to date
O The amount that should be expensed over an asset's useful life
Chapter 5 Solutions
College Accounting, Chapters 1-27
Ch. 5 - The matching principle in accounting requires the...Ch. 5 - Prob. 2TFCh. 5 - LO1 As part of the adjustment of supplies, an...Ch. 5 - LO1 Depreciable cost is the difference between the...Ch. 5 - LO1 The purpose of depreciation is to record the...Ch. 5 - LO1 The purpose of depreciation is to (a) spread...Ch. 5 - Prob. 2MCCh. 5 - Prob. 3MCCh. 5 - Prob. 4MCCh. 5 - The first step in preparing a work sheet is to (a)...
Ch. 5 - On December 31, the trial balance indicates that...Ch. 5 - LO2 When posting adjusting entries to the general...Ch. 5 - Prob. 3CECh. 5 - Prob. 4CECh. 5 - LO5 Using the following partial work sheet...Ch. 5 - Prob. 6CECh. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - What is an assets depreciable cost?Ch. 5 - Prob. 10RQCh. 5 - Prob. 11RQCh. 5 - Identify the five major column headings on a work...Ch. 5 - List the five steps taken in preparing a work...Ch. 5 - Prob. 14RQCh. 5 - Explain when revenues are recorded under the cash...Ch. 5 - Prob. 16RQCh. 5 - ADJUSTMENT FOR SUPPLIES On December 31, the trial...Ch. 5 - Prob. 2SEACh. 5 - ADJUSTMENT FOR WAGES On December 31, the trial...Ch. 5 - ADJUSTMENT FOR DEPRECIATION OF ASSET On December...Ch. 5 - CALCULATION OF BOOK VALUE On June 1, 20--, a...Ch. 5 - ANALYSIS OF ADJUSTING ENTRY FOR SUPPLIES Analyze...Ch. 5 - Prob. 7SEACh. 5 - POSTING ADJUSTING ENTRIES Two adjusting entries...Ch. 5 - WORK SHEET AND ADJUSTING ENTRIES A partial work...Ch. 5 - JOURNALIZING ADJUSTING ENTRIES From the...Ch. 5 - Prob. 11SEACh. 5 - ANALYSIS OF NET INCOME OR NET LOSS ON THE WORK...Ch. 5 - CASH, MODIFIED CASH, AND ACCRUAL BASES OF...Ch. 5 - ADJUSTMENTS AND WORK SHEET SHOWING NET INCOME The...Ch. 5 - ADJUSTMENTS AND WORK SHEET SHOWING A NET LOSS...Ch. 5 - JOURNALIZE AND POST ADJUSTING ENTRIES FROM THE...Ch. 5 - Prob. 17SPACh. 5 - ADJUSTMENT FOR SUPPLIES On July 31, the trial...Ch. 5 - ADJUSTMENT FOR INSURANCE On July 1, a six-month...Ch. 5 - ADJUSTMENT FOR WAGES On July 31, the trial balance...Ch. 5 - ADJUSTMENT FOR DEPRECIATION OF ASSET On July 1,...Ch. 5 - CALCULATION OF BOOK VALUE On January 1, 20--, a...Ch. 5 - ANALY SIS OF ADJUSTING ENTRY FOR SUPPLIES Analyze...Ch. 5 - ANALY SIS OF ADJUSTING ENTRY FOR INSURANCE Analyze...Ch. 5 - POSTING ADJUSTING ENTRIES Two adjusting entries...Ch. 5 - WORK SHEET AND ADJUSTING ENTRIES A partial work...Ch. 5 - JOURNALIZING ADJUSTING ENTRIES From the...Ch. 5 - EXTENDING ADJUSTED BALANCES TO THE INCOME...Ch. 5 - Prob. 12SEBCh. 5 - CASH, MODIFIED CASH, AND ACCRUAL BASES OF...Ch. 5 - Prob. 14SPBCh. 5 - Prob. 15SPBCh. 5 - JOURNALIZE AND POST ADJUSTING ENTRIES FROM THE...Ch. 5 - CORRECTING WORK SHEET WITH ERRORS A beginning...Ch. 5 - Delia Alvarez, owner of Delias Lawn Service, wants...Ch. 5 - Prob. 1MPCh. 5 - Prob. 1CP
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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
- What is the primary purpose of depreciation?arrow_forwardWhat is the 'carrying amount of a depreciating non-current asset? O A. The cost (or fair value) of the asset less the accumulated depreciation on that asset O B. The current market value of the asset C. The cost (or fair value) of the asset less the current year's depreciation O D. The cost (or fair value) of the assetarrow_forwardDepreciation is a process used to: a) Increase the value of an asset over time b) Allocate the cost of an asset over its useful life c) Reduce the market value of anasset d) Record the sale of an assetarrow_forward
- Evaluate the consequences of depreciation charged on the historical cost of the assets. I) depreciation is calculated on the original cost of fixed assets, the resulting figure under accumulated depreciation will be only the amount equivalent to the original costof the asset. II) If depreciation is calculated as per historical accounting, sufficient funds will not be available for assets' replacement when its life is over. III) the replacement cost of the asset will be more than the original cost of inflation so that replacement provisions made by the way of depreciation charge on the original cost will be insufficient. IV) the conventional system of accounts based on historical cost does not give a true and fair view of the business enterprise. a. Statements I, Il and IV b. Statements I, II II and IV C. Statements I, Il and II d. Statements II, IIl and IVarrow_forwardWhich of the following statements if not true? a. Depreciation is the process of allocating the purchase price of an asset minues its residual value to expense, for each period benefited by the asset. b. The cost of an asset includes all acquisition costs necessary to obtain the benefits to be derived from the asset. c. The service life of an asset is the measure of the number of years of service expected from the asset before its disposal. d. The residual value of an asset is the difference between the expected book value of the asset at the end of its service and the cost of disposal.arrow_forward1. 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. Depletionarrow_forward
- Why is depreciation expense recognized? Select one: a. To provide a better estimate of the market value of the depreciated assets. b. So that the balance sheet value of plant assets will more accurately reflect the replacement cost of the assets. c. To ensure that cash will be available at the end of the assets' useful life in order to replace it. d. To match the cost of the asset against the revenue using a reasonable allocation. method. Save AnswersNextarrow_forwardWhat 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_forwardProvide right Ansarrow_forward
- Question on, "what is depreciation".. Simple. I have tried it but confused about which choice.arrow_forwardWhich of the following best describes depreciation? A.ccounts for the market value of a physical asset B.Part of the cost of a physical asset allocated as an expense to each time period in which the asset is used. C.Shows the increase in value of a physical asset over the asset’s useful life D.Shows the drop in value of an asset when the asset is first used by an entityarrow_forwardAllocating 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…arrow_forward
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