Accounting for Fixed Assets and Depreciation Quiz
Test your knowledge on fixed assets, depreciation methods, and accounting principles with these 14 questions.
#1
Which of the following is considered a fixed asset?
Office supplies
Cash
Building
Accounts receivable
#2
What is depreciation?
The process of increasing the value of an asset
The process of reducing the value of an asset over its useful life
The process of maintaining the value of an asset
The process of recording asset purchases
#3
Which of the following is NOT a fixed asset?
Land
Patents
Inventory
Equipment
#4
What is the salvage value of an asset?
The value of an asset when it is disposed of
The value of an asset when it is first acquired
The cost of maintaining an asset
The estimated residual value of an asset at the end of its useful life
#5
Which depreciation method allocates an equal amount of depreciation expense each year of the asset's useful life?
Straight-line depreciation
Double-declining balance depreciation
Units of production depreciation
Sum-of-the-years'-digits depreciation
#6
Which of the following is NOT a factor in determining depreciation expense under the straight-line method?
Cost of the asset
Residual value
Useful life
Maintenance costs
#7
Which of the following is a contra account to accumulated depreciation?
Accumulated amortization
Accumulated impairment
Accumulated appreciation
Accumulated depletion
#8
What happens to book value when depreciation expense is recorded?
Increases
Decreases
Remains the same
Depends on the method used
#9
Which of the following methods of depreciation results in the highest depreciation expense in the first year?
Straight-line depreciation
Double-declining balance depreciation
Units of production depreciation
Sum-of-the-years'-digits depreciation
#10
What is the formula for calculating depreciation expense using the straight-line method?
(Cost of the asset - Salvage value) / Useful life
(Cost of the asset / Useful life) * 2
(Cost of the asset - Salvage value) * 2
(Cost of the asset * Useful life) / Salvage value
#11
Under which method of depreciation does an asset's depreciation expense vary based on its usage?
Straight-line depreciation
Double-declining balance depreciation
Units of production depreciation
Sum-of-the-years'-digits depreciation
#12
Which of the following is NOT a reason for depreciating fixed assets?
To match expenses with revenues
To allocate the cost of the asset over its useful life
To adjust for inflation
To provide for the eventual replacement of the asset
#13
When using the sum-of-the-years'-digits method, which factor decreases each year?
Cost of the asset
Residual value
Useful life
Depreciation rate
#14
What is the double-declining balance method of depreciation based on?
Asset's useful life
Asset's book value
Asset's historical cost
Asset's market value
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