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Multiple choice theories 1 which of the following

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MULTIPLE CHOICE (THEORIES)1.Which of the following describes depreciation?I.It is an accounting procedure by which the cost of an asset is rationally allocatedto accounting periods benefited.II.The removal of an asset from an entity’s statement of financial positionA.I onlyB.II only
FAR HANDOUTSC.Both I and IID.Neither I and II2.Which of the following statement is incorrect concerning the residual value of an item ofproperty, plant and equipment?
3.On January 20x1, ABC Co. placed an order for equipment. The supplier shipped theequipment on January 15 20x1 and was received by ABC Co. on February 1, 20x1.Installation and testing were finished by March 1, 20x1 and the equipment is availablefor use on this date. However, ABC Co, started using the equipment only on May 1,20x1. According to PAS 16, when should ABC Co. start depreciating the equipment?
4.S1: An asset is said to be fully depreciated when carrying amount is zero or equal to itsresidual valueS2: In using group or composite method, gain or toss may be recognized as the differenceof the net disposal price and carrying amount of the disposed item of PPE of the group.S3: variable charge methods of depreciation are based on the philosophy that new assets aregenerally capable of producing more revenue in the earlier years than in the later years.S4: When an estimate of an assets useful life is changed, only the depreciation expense inthe remaining year is changedS5: Depreciation stops when an item of PPE is derecognized or becomes temporarily idlewhichever comes first

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Term
Winter
Professor
ABEASLEY
Tags
Depreciation, Plant Equipment, government grants

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