#1
Which of the following is an example of a tangible asset?
Copyright
Trademark
Building
Patent
#2
Which of the following factors does NOT affect the choice of depreciation method?
Asset's useful life
Asset's salvage value
Asset's historical cost
Asset's market value
#3
Which of the following is NOT a depreciation method?
#4
What does the term 'depreciation' refer to in the context of asset valuation?
Increase in asset value over time
Decrease in asset value over time
Maintenance costs of the asset
Appreciation of the asset
#5
Which of the following depreciation methods is often used for assets with a long and predictable useful life?
Double-declining balance depreciation
Units-of-production depreciation
Straight-line depreciation
Sum-of-the-years'-digits depreciation
#6
Which depreciation method allocates an equal amount of depreciation expense to each period of the asset's useful life?
Straight-line depreciation
Double-declining balance depreciation
Units-of-production depreciation
Sum-of-the-years'-digits depreciation
#7
What is the formula to calculate book value of an asset?
Purchase price - Accumulated depreciation
Purchase price + Accumulated depreciation
Purchase price / Accumulated depreciation
Purchase price * Accumulated depreciation
#8
Which of the following methods results in higher depreciation expense in the earlier years of an asset's life?
Straight-line depreciation
Double-declining balance depreciation
Units-of-production depreciation
Sum-of-the-years'-digits depreciation
#9
Which depreciation method is based on the assumption that an asset depreciates more in its early years and less in its later years?
Straight-line depreciation
Double-declining balance depreciation
Units-of-production depreciation
Sum-of-the-years'-digits depreciation
#10
What does the term 'salvage value' refer to in asset valuation?
The amount for which the asset can be sold at the end of its useful life
The amount spent on maintenance of the asset
The original purchase price of the asset
The annual depreciation expense of the asset
#11
Which depreciation method is often used for assets like vehicles and machinery, where usage varies significantly each year?
Straight-line depreciation
Double-declining balance depreciation
Units-of-production depreciation
Sum-of-the-years'-digits depreciation
#12
Which depreciation method considers the asset's expected usage in determining depreciation expense?
Straight-line depreciation
Double-declining balance depreciation
Units-of-production depreciation
Sum-of-the-years'-digits depreciation
#13
What is the main advantage of the double-declining balance depreciation method?
It results in the lowest depreciation expense over the asset's useful life
It provides the most accurate reflection of an asset's usage
It results in higher depreciation expense in earlier years, reflecting the asset's actual decline in value
It is the simplest and easiest depreciation method to calculate
#14
What is the primary drawback of using the sum-of-the-years'-digits (SOYD) depreciation method?
It requires complex calculations
It results in an inconsistent pattern of depreciation expenses
It cannot be used for tax purposes
It does not allocate depreciation evenly over the asset's useful life
#15
What is the main limitation of the straight-line depreciation method?
It results in inconsistent depreciation expenses over time
It cannot be used for tax purposes
It requires complex calculations
It does not consider an asset's actual usage
#16
What is the main advantage of the double-declining balance depreciation method over the straight-line method?
It results in lower depreciation expense over the asset's useful life
It provides a more accurate reflection of an asset's usage
It allocates higher depreciation expense in earlier years, reflecting the asset's actual decline in value
It is easier to understand and apply