Multiple Choice: Valuing Noncurrent Assets Select the correct answer for each of the following.

The cost of a newly purchased truck subject to rapid obsolescence should be allocated to:

a. Depletion expense in the year of acquisition.

b. Depletion expense over a relatively short number of periods.

c. Amortization expense over a relatively short number of periods.

d. Depreciation expense using accelerated depreciation.

Which of the following is an example of accelerated depreciation?

a. Double-declining-balance depreciation.

b. Activity-based depreciation.

c. Straight-line depreciation.

d. Inverse-balance depreciation.

e. Botha and b.
3. From an accounting perspective, depletion represents:

a. The cost of using buildings and equipment.

b. The cost of using land.

c. The using up of natural resources.

d. The using up of all of the available inventory in one period.
4. When an asset is acquired, its recorded cost:

a. Includes interest whenever the purchase price is borrowed.

b. Is the list price, ignoring all discounts and price reductions.

c. Includes all costs necessary to acquire the asset and get it in the condition and location such that the company can do with it what it intends.

d. All of the above.