1. Chapter 10 Review

2. REVIEW QUESTION 1 Which of the depreciation methods writes off more depreciation near the start of an asset’s than in later years? – Units of Production – Declining balance – Straight line – All of the above

3. REVIEW QUESTION 1 Which of the depreciation methods writes off more depreciation near the start of an asset’s than in later years? – Units of Production – Declining balance – Straight line – All of the above

4. REVIEW QUESTION 2 Which of the depreciation methods allocates an equal amount of depreciation to each year? – Units of Production – Declining balance – Straight line – All of the above

5. REVIEW QUESTION 2 Which of the depreciation methods allocates an equal amount of depreciation to each year? – Units of Production – Declining balance – Straight line – All of the above

6. REVIEW QUESTION 3 Which of the depreciation methods does NOT use a residual method in the first year? – Units of Production – Declining balance – Straight line – All of the above

7. REVIEW QUESTION 3 Which of the depreciation methods does NOT use a residual method in the first year? – Units of Production – Declining balance – Straight line – All of the above

8. REVIEW QUESTION 4 Which of the accounting methods is used to compute amortization? – Units of Production – Declining balance – Straight line – All of the above

9. REVIEW QUESTION 4 Which of the accounting methods is used to compute amortization? – Units of Production – Declining balance – Straight line – All of the above

10. REVIEW QUESTION 5 Which of the accounting methods is used to compute depletion? – Units of Production – Declining balance – Straight line – All of the above

11. REVIEW QUESTION 5 Which of the accounting methods is used to compute depletion? – Units of Production – Declining balance – Straight line – All of the above

12. REVIEW QUESTION 5 Which of the depreciation methods allocates a fixed dollar amount per unit of output by an asset? – Units of Production – Declining balance – Straight line – All of the above

13. REVIEW QUESTION 5 Which of the depreciation methods allocates a fixed dollar amount per unit of output by an asset? – Units of Production – Declining balance – Straight line – All of the above

14. REVIEW QUESTION 6 Which of the depreciation methods is used MOST by companies for their financial statements? – Units of Production – Declining balance – Straight line – All of the above

15. REVIEW QUESTION 6 Which of the depreciation methods is used MOST by companies for their financial statements? – Units of Production – Declining balance – Straight line – All of the above

16. REVIEW QUESTION 7 Which of the depreciation methods is calculated by multiplying the asset’s decreasing book value by a percent that is two times the straight-line rate? – Units of Production – Declining balance – Straight line – All of the above

17. REVIEW QUESTION 7 Which of the depreciation methods is calculated by multiplying the asset’s decreasing book value by a percent that is two times the straight-line rate? – Units of Production – Declining balance – Straight line – All of the above

18. REVIEW QUESTION 8 Which of the depreciation methods is preferable for tax purposes? – Units of Production – Declining balance – Straight line – All of the above

19. REVIEW QUESTION 8 Which of the depreciation methods is preferable for tax purposes? – Units of Production – Declining balance – Straight line – All of the above

20. True or False The cost of fencing around a building is included in the cost of the building

21. True or False The cost of fencing around a building is included in the cost of the building

22. True or False The cost of land includes the cost of removing unwanted buildings

23. True or False The cost of land includes the cost of removing unwanted buildings

24. True or False Treating a capital expenditure as an expense causes an understatement of net income

25. True or False Treating a capital expenditure as an expense causes an understatement of net income

26. True or False Estimated residual value is the expected cash value of an asset at the end of its useful life

27. True or False Estimated residual value is the expected cash value of an asset at the end of its useful life

28. True or False A loss on the sale of a plant asset is recorded when the sales price exceeds the book value

29. True or False A loss on the sale of a plant asset is recorded when the sales price exceeds the book value

30. True or False Tangible assets are assets with no physical form that have value because of the special rights they carry

31. True or False Tangible assets are assets with no physical form that have value because of the special rights they carry

32. True or False Depletion expense is the portion of a natural resource’s cost used up in a particular period

33. True or False Depletion expense is the portion of a natural resource’s cost used up in a particular period

34. True or False A patent is an exclusive right to reproduce and sell a book, musical composition, film, other work of art, or computer program, and must be amortized over the useful life of the patent.

35. True or False A patent is an exclusive right to reproduce and sell a book, musical composition, film, other work of art, or computer program, and must be amortized over the useful life of the patent.

36. True or False If assets are junked before being fully depreciated, there is a loss equal to the book value of the assets.

37. True or False If assets are junked before being fully depreciated, there is a loss equal to the book value of the assets.

38. True or False You capitalize all costs that provide future benefit

39. True or False You capitalize all costs that provide future benefit

40. Other terms to look over Plant assets Residual value Amortization Depletion Tangible vs. intangible assets Land vs. land improvements Ordinary vs. extra ordinary repairs Copyright, brand names, licenses, patents