#1
Which of the following is a depreciation method based on time?
Straight-line depreciation
ExplanationDepreciation method allocating equal expense yearly.
#2
Which of the following is NOT a depreciation method?
Unit-of-time depreciation
ExplanationUnit-of-time depreciation isn't a recognized method.
#3
What is the salvage value of an asset?
The value of the asset at the end of its useful life
ExplanationAsset's remaining value at end of its life.
#4
Which of the following is NOT a depreciation expense recognition method?
FIFO depreciation
ExplanationFIFO isn't a recognized depreciation method.
#5
Which of the following is a depreciation method that allocates an equal amount of depreciation expense each year?
Straight-line depreciation
ExplanationUniform depreciation distribution over time.
#6
What is the formula for straight-line depreciation?
(Cost - Salvage Value) / Useful Life
ExplanationCost minus Salvage Value divided by Useful Life.
#7
Which depreciation method considers higher depreciation expenses in the earlier years of an asset's life?
Double-declining balance depreciation
ExplanationHigher expenses in early years; accelerated depreciation.
#8
Which of the following factors does NOT affect depreciation?
Market value of the asset
ExplanationMarket value isn't a factor in depreciation.
#9
What does MACRS stand for in depreciation accounting?
Modified Accelerated Cost Recovery System
ExplanationA system for accelerated depreciation.
#10
Which depreciation method is often used for assets with unpredictable patterns of use?
Units of production depreciation
ExplanationDepreciation based on production units.
#11
What is the formula for calculating depreciation expense using the units of production method?
(Units Produced / Total Expected Units) * (Cost - Salvage Value)
ExplanationRatio of actual to expected units times cost minus salvage.
#12
What is the primary advantage of the double-declining balance depreciation method?
It results in a higher depreciation expense in the early years.
ExplanationAccelerated depreciation with higher early expenses.
#13
Which of the following depreciation methods allocates the same amount of depreciation expense each year?
Straight-line depreciation
ExplanationUniform depreciation expense distribution.
#14
What is the primary disadvantage of the double-declining balance depreciation method?
It doesn't account for the salvage value of the asset.
ExplanationFails to consider asset's salvage value.
#15
What is the purpose of depreciation accounting?
To track the decrease in value of assets over time
ExplanationTracking assets' devaluation over time.
#16
Which depreciation method assumes that the asset is used at a constant rate over its useful life?
Straight-line depreciation
ExplanationAsset usage remains constant throughout.