Chapter 11 - SelfTest,Question1 Correct Depreciationisa...

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Self Test, Question 1
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Correct.      Depreciation is a: means of cost allocation. measure of changes in an asset's value. decline in an asset's fair market value. matter of valuation. Self Test, Question 2 Correct.      All of the following are economic factors related to depreciation except: wear and tear. inadequacy. obsolescence. supersession. Self Test, Question 3
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Correct.      The depreciable base of an asset is its original cost: plus salvage value. less accumulated depreciation. less salvage value. plus accumulated depreciation. Self Test, Question 4 Correct.     Which one of the following is not  an accelerated depreciation method? Sum-of-the years' digits method. Double-declining-balance method. Declining-balance method. Activity method. Self Test, Question 5
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Correct.      The depreciation method that considers depreciation a function of time rather than a function of usage is the: sum-of-the-years' digits method. straight-line method. activity method. declining-balance method. Self Test, Question 6 Correct.      The method that does not deduct salvage value in computing depreciation is the: sum-of-the-years' digits method. straight-line method. declining-balance method. activity method. Self Test, Question 7
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Correct.      A depreciation method that is used when a collection of assets are heterogeneous and have different lives is the: hybrid method. combination method. composite method. group method. Self Test, Question 8 Correct.      The composite depreciation rate is determined by dividing the depreciation per year by the asset's: book value. depreciable cost. depreciable base. total cost. Self Test, Question 9
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Correct.      In computing partial-year depreciation, depreciation is normally computed on the basis of: the nearest fraction of a year. the nearest full month. a half year's depreciation in the period of acquisition and disposal. a full year's depreciation in the period of acquisition and none in the year of disposal. Self Test, Question 10 Correct.      Which one of the following statements regarding revision of depreciation rates is incorrect? Opening balances are not adjusted when a change in estimate occurs. Changes in estimate should be handled in the current period only. Depreciation is computing by dividing the remaining book value less any salvage value by the remaining estimated life. No entry is made at the time a revision of depreciation rates occurs. Self Test, Question 11
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Correct.      An impairment loss is the excess of the carrying amount of an asset over the: expected future net cash flows.
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