It is not a matter of valuation
It is part of the matching of revenues and expenses
It retains funds by reducing income taxes and dividends
All of these
Associating cause and effect
Systematic and rational allocation
All of these
The process of charging the decline in value of an economic resource to income in the period in which the benefit occurred
The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset
A method of allocating asset cost to an expense account in a manner which closely matches the physical deterioration of the tangible asset involved
An accounting concept that allocates the portion of an asset used up during the year to the contra asset account for the purpose of properly recording the fair market value of tangible assets.
Service life refers to the time an asset will be used by a company and physical life refers to how long the asset will last.
Physical life is the life of an asset without consideration of salvage value and service life requires the use of salvage value.
Physical life is always longer than service life.
Service life refers to the length of time an asset is of use to its original owner, while physical life refers to how long the asset will be used by all owners.
The total amount to be charged (debited) to expense over an asset's useful life
The cost of the asset less the related depreciation recorded to date
The estimated market value of the asset at the end of its useful life
The acquisition cost of the asset
All of these
What is the depreciation base to use for the asset?
What is the asset's useful life?
What method of cost apportionment is best for this asset?
What product or service is the asset related to?
The asset's economic usefulness is the same each year
The repair and maintenance expense is essentially the same each period
The rate of return analysis is enhanced using the straight-line method
Depreciation is a function of time rather than a function of usage
Is a variable charge approach
Assumes that depreciation is a function of the passage of time
Conceptually associates cost in terms of input measures.
All of these
Vary with unit sales
Vary with sales revenue
Vary with production
Results in a decreasing charge to depreciation expense
Means salvage value is not deducted in computing the depreciation base
Means the book value should not be reduced below salvage value
All of these.
Results in salvage value being ignored.
Means the denominator is the years remaining at the beginning of the year.
Means the book value should not be reduced below salvage value.
All of these
Vertically and sloping down to the right
Vertically and sloping up to the right
Horizontally and sloping down to the right
Horizontally and sloping up to the right
Provides for the declining productivity of an aging asset.
Ignores variations in the rate of asset use
Tends to result in a constant rate of return on a diminishing investment base
Gives smaller periodic write-offs than decreasing charge methods.
Company should have been using one of the accelerated methods of depreciation
Estimated average life of the machinery is less than the actual average useful life
Estimated average life of the machinery is greater than the actual average useful life
Company has been retiring fully depreciated machinery that should have remained in service.
Rate is the total cost divided by the total annual depreciation
Rate is the total annual depreciation divided by the total depreciable cost
Life is the total cost divided by the total annual depreciation
Life is the total depreciable cost divided by the total annual depreciation
Original cost of the truck
Original cost of the truck less the cash proceeds.
Cash proceeds received
Cash proceeds received and original cost of the truck
The years of useful life of the various assets in the group are added together and the total divided by the number of items.
The cost of individual units within an asset group is charged to expense in the year a unit is retired from service
A straight-line rate is computed by dividing the total of the annual depreciation expense for all assets in the group by the total cost of the assets
The original cost of all items in a given group or class of assets is retained in the asset account and the cost of replacements is charged to expense when they are acquired.
Charge a full year's depreciation to the year of acquisition
Determine depreciation expense for the full year and then prorate the expense between the two periods involved.
Use the straight-line method for the year in which the asset is sold or otherwise disposed of.
Use a salvage value equal to the first year's partial depreciation charge
Full month and to the nearest cent
Full month and to the nearest dollar
Day and to the nearest cent.
Day and to the nearest dollar
As a prior period adjustment
As the cumulative effect of a change in accounting principle in 2010
By setting future annual depreciation equal to one-sixth of the book value on January 1, 2010
By continuing to depreciate the machinery over the original fifteen year life
Result in restatement of prior period statements.
Be handled in current and future periods
Be handled in future periods only
Be handled retroactively
Recognize an extraordinary loss for the period
Include a credit to the equipment accumulated depreciation account
Include a credit to the equipment account.
Not be made if the equipment is still being used