QUESTION 1

Which depreciation method ignores residual value when computing the depreciable base of an asset?

		sum-of-the-years'-digits method
		double-declining-balance method
		composite method
		group method

QUESTION 2

Depreciation of an asset based on the number of hours of usage is a(n)

		time-based method
		accelerated method
		replacement method
		activity-based method

QUESTION 3

Which of the following is not a factor in computing depreciation for a period?

		method of cost allocation
		service life
		present value
		residual value

QUESTION 4

On January 1, 2014, Lefty, Inc. purchased a machine for $6,000. The estimated life and residual value were five years and $150, respectively. The machine will produce approximately 80,000 units over its life. In 2014 and 2015, the machine produced 10,000 and 15,000 units, respectively. In 2015, Lefty recorded $1,440 of depreciation expense. The depreciation method in use was the

		activity method
		sum-of-the-years'-digits method
		double-declining-balance method
		straight-line method

QUESTION 5

What type of cost allocation must a company use?

		systematic
		rational
		systematic and rational
		systematic, rational, and reliable