CHAPTER 11 DEPRECIATION, IMPAIRMENTS, AND DEPLETION IFRS questions are available at the end of this chapter. TRUE-FALSE —Conceptual Answer No. Description T 1. Nature of depreciation. F 2. Nature of depreciation. T 3. Depreciation, depletion, and amortization. T 4. Definition of depreciation base. F 5. Factors involved in depreciation process. F 6. Definition of inadequacy. T 7. Objection to straight-line method. F 8. Units-of-production approach. F 9. Accelerated depreciation method. T 10. Declining-balance method. T 11. Group or composite approach. F 12. Use of the composite approach. T 13. Accounting for changes in estimates. F 14. Computation of impairment loss amount. T 15. First step in determining an impairment. T 16. Reporting impaired assets held for disposal. F 17. Method used to compute depletion. T 18. Costs included in depletion base. F 19. Computing asset turnover ratio. T 20 Profit margin on sales ratio. MULTIPLE CHOICE —Conceptual Answer No. Description d 21. Knowledge of depreciation accounting. b 22. Conceptual rationale for depreciation accounting. c 23. Depreciation and retaining funds. b S 24. Definition of depreciation. a S 25. Service life vs. physical life. a P 26. Definition of depreciable cost. d 27. Economic factors affecting useful service life. d 28. Factors involved in computing depreciation. d 29. Straight-line method assumption. a 30. Activity method of depreciation. a 31. Units-of-production method of depreciation. d 32. Units-of-production method of depreciation. d 33. Knowledge of double-declining balance method. c 34. Components of sum-of-the-years'-digits method. c 35. Graphic depiction of straight-line and sum-of-the-years'-digits methods. b 36. Disadvantage of using straight-line method.
Test Bank for Intermediate Accounting, Thirteenth Edition 11 - 2 MULTIPLE CHOICE —Conceptual (cont.) Answer No. Description b 37. Group method of depreciation. d 38. Identification of composite life. c P 39. Group method of depreciation. c S 40. Composite or group depreciation. b 41. Partial-year depreciation computation. b 42. Depreciation for part year. c 43. Change in estimated life of depreciable asset. b 44. Reporting a change in estimate. b 45. Recording an asset impairment. d 46. Depreciation and cost depletion similarities. d 47. Difference between depreciation and cost depletion. d 48. Depreciation and liquidating dividends. a 49. Classification of depletion expense. d 50. Units-of-production depletion expense. d 51. Reserve recognition accounting. c S 52. Items part of depletion cost. b S 53. Required disclosures for depreciation. b P 54. Definition of book value. d 55. Disclosure of depreciation policy. d 56. Asset turnover ratio. d
This is the end of the preview. Sign up to
access the rest of the document.