ch11 - CHAPTER 11 DEPRECIATION, IMPAIRMENTS, AND DEPLETION

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CHAPTER 11 DEPRECIATION, IMPAIRMENTS, AND DEPLETION 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. a 28. Activity method of depreciation. a 29. Units-of-production method of depreciation. d 30. Units-of-production method of depreciation. d 31. Knowledge of double-declining balance method. c 32. Components of sum-of-the-years'-digits method. c 33. Graphic depiction of straight-line and sum-of-the-years'-digits methods. b 34. Disadvantage of using straight-line method. b 35. Group method of depreciation. d 36. Identification of composite life.
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Test Bank for Intermediate Accounting, Twelfth Edition 11 - 2 MULTIPLE CHOICE —Conceptual (cont.) Answer No. Description c P 37. Group method of depreciation. c S 38. Composite or group depreciation. b 39. Depreciation for part year. c 40. Change in estimated life of depreciable asset. b 41. Reporting a change in estimate. b 42. Recording an asset impairment. d 43. Depreciation and liquidating dividends. a 44. Classification of depletion expense. d 45. Units-of-production depletion expense. d 46. Reserve recognition accounting. c S 47. Items part of depletion cost. b S 48. Required disclosures for depreciation. b P 49. Definition of book value. d 50. Disclosure of depreciation policy. d 51. Asset turnover ratio. c *52. Objectives of MACRS method. d *53. Factors to consider in MACRS tax depreciation. c *54. Effect of accelerated depreciation on the income statement. P These questions also appear in the Problem-Solving Survival Guide. S These questions also appear in the Study Guide. * This topic is dealt with in an Appendix to the chapter. MULTIPLE CHOICE
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This note was uploaded on 03/22/2012 for the course ACC 202 taught by Professor Savage during the Spring '12 term at Essex County College.

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ch11 - CHAPTER 11 DEPRECIATION, IMPAIRMENTS, AND DEPLETION

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