Question 1

The book value (or carrying amount)is:

Accepted Answer

A)  The difference between the asset's cost and the balance of its accumulated depreciation. 
B)  The difference between the asset's cost and the depreciation expense of the year. 
C)  The difference between the asset's purchase price and the other directly attributable costs. 
D)  None of these

Question 2

It is appropriate to use the straight-line method of depreciation if the decline of service potential relates primarily to the passage of time rather than to the level of activity,and if it can be assumed the asset will be equally productive each year.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following equations is correct?

Accepted Answer

A)  Depreciable amount = Acquisition cost + Estimated residual value 
B)  Depreciable amount = Purchase price - Estimated residual value 
C)  Depreciable amount = Acquisition cost - Estimated residual value 
D)  Depreciable amount = Purchase price + Estimated residual value

Question 4

When using the systematic manner,the computation of the depreciation expense is based on a formula,which was decided at,or before,the time of acquisition and can be modified several times during the life of the asset.

Accepted Answer

A) True 
 B)False

Question 5

For which class of assets is the productive output method particularly appropriate?

Accepted Answer

A)  Land 
B)  Buildings 
C)  Office furniture 
D)  Manufacturing equipment

Question 6

The cost of a tangible asset is allocated over time.What is systematic allocation designed to reflect?

Accepted Answer

A)  The recognition of some form of unpredictable event that modifies the value of the asset 
B)  An ongoing process of consumption. 
C)  An unusual loss in value. 
D)  None of these

Exam 7: Tangible Fixed Assets

The book value (or carrying amount) is:

It is appropriate to use the straight-line method of depreciation if the decline of service potential relates primarily to the passage of time rather than to the level of activity,and if it can be assumed the asset will be equally productive each year.

Which of the following equations is correct?

When using the systematic manner,the computation of the depreciation expense is based on a formula,which was decided at,or before,the time of acquisition and can be modified several times during the life of the asset.

For which class of assets is the productive output method particularly appropriate?

The cost of a tangible asset is allocated over time.What is systematic allocation designed to reflect?