Chapter 10 Review
REVIEW QUESTION 1
• Which of the depreciation methods writes off
more depreciation near the start of an asset’s
than in later years?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 1
• Which of the depreciation methods writes off
more depreciation near the start of an asset’s
than in later years?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 2
• Which of the depreciation methods allocates
an equal amount of depreciation to each
year?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 2
• Which of the depreciation methods allocates
an equal amount of depreciation to each
year?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 3
• Which of the depreciation methods does NOT
use a residual method in the first year?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 3
• Which of the depreciation methods does NOT
use a residual method in the first year?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 4
• Which of the accounting methods is used to
compute amortization?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 4
• Which of the accounting methods is used to
compute amortization?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 5
• Which of the accounting methods is used to
compute depletion?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 5
• Which of the accounting methods is used to
compute depletion?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 5
• Which of the depreciation methods allocates a
fixed dollar amount per unit of output by an
asset?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 5
• Which of the depreciation methods allocates a
fixed dollar amount per unit of output by an
asset?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 6
• Which of the depreciation methods is used
MOST by companies for their financial
statements?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 6
• Which of the depreciation methods is used
MOST by companies for their financial
statements?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 7
• Which of the depreciation methods is
calculated by multiplying the asset’s
decreasing book value by a percent that is two
times the straight-line rate?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 7
• Which of the depreciation methods is
calculated by multiplying the asset’s
decreasing book value by a percent that is two
times the straight-line rate?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 8
• Which of the depreciation methods is
preferable for tax purposes?
– Units of Production
– Declining balance
– Straight line
– All of the above
REVIEW QUESTION 8
• Which of the depreciation methods is
preferable for tax purposes?
– Units of Production
– Declining balance
– Straight line
– All of the above
True or False
• The cost of fencing around a building is
included in the cost of the building
True or False
• The cost of fencing around a building is
included in the cost of the building
True or False
• The cost of land includes the cost of removing
unwanted buildings
True or False
• The cost of land includes the cost of removing
unwanted buildings
True or False
• Treating a capital expenditure as an expense
causes an understatement of net income
True or False
• Treating a capital expenditure as an expense
causes an understatement of net income
True or False
• Estimated residual value is the expected cash
value of an asset at the end of its useful life
True or False
• Estimated residual value is the expected cash
value of an asset at the end of its useful life
True or False
• A loss on the sale of a plant asset is recorded
when the sales price exceeds the book value
True or False
• A loss on the sale of a plant asset is recorded
when the sales price exceeds the book value
True or False
• Tangible assets are assets with no physical
form that have value because of the special
rights they carry
True or False
• Tangible assets are assets with no physical
form that have value because of the special
rights they carry
True or False
• Depletion expense is the portion of a natural
resource’s cost used up in a particular period
True or False
• Depletion expense is the portion of a natural
resource’s cost used up in a particular period
True or False
• A patent is an exclusive right to reproduce and
sell a book, musical composition, film, other
work of art, or computer program, and must
be amortized over the useful life of the patent.
True or False
• A patent is an exclusive right to reproduce and
sell a book, musical composition, film, other
work of art, or computer program, and must
be amortized over the useful life of the patent.
True or False
• If assets are junked before being fully
depreciated, there is a loss equal to the book
value of the assets.
True or False
• If assets are junked before being fully
depreciated, there is a loss equal to the book
value of the assets.
True or False
• You capitalize all costs that provide future
benefit
True or False
• You capitalize all costs that provide future
benefit
Other terms to look over
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Plant assets
Residual value
Amortization
Depletion
Tangible vs. intangible assets
Land vs. land improvements
Ordinary vs. extra ordinary repairs
Copyright, brand names, licenses, patents