final_practice_questions2 - Practice Questions Chapters 8,...

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Practice Questions – Chapters 8, 9 & 12 1. Plant assets refer to intangible assets that are used in the operations of a business. True or False? 2. Depreciation should be recorded on the date an asset is purchased. True or False? 3. Revising an estimate of the useful life or salvage value of a plant asset is referred to as a change in accounting estimate, and is reflected in the past, current, and future financial statements. True or False? 4. Decision makers and other users of financial statements are especially interested in evaluating a company’s ability to use its assets in generating sales. True or False? 5. The cost of fees for insuring the title and any accrued property taxes are included in the cost of land. True or False? 6. The double-declining balance method is applied by (1) computing the asset’s strait-line depreciation rate, (2) doubling it, (3) subtracting salvage value from cost, and (4) multiplying the rate times the net value. True or False? 7. When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $23,000 and its estimated salvage value is $1,500. After 4 years of strait-line depreciation, the asset’s total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5 equals: ??? 8.
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This note was uploaded on 05/18/2008 for the course MGT 011A taught by Professor Hancock,john during the Fall '07 term at UC Davis.

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final_practice_questions2 - Practice Questions Chapters 8,...

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