Question

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Select one:

Straight-line

MACRS

Declining balance

All the above use residual value

Question

The accounting term depreciation measures __________.

Select one:

An assets market value decline

The amount of cash a company sets aside for asset replacement

The amount of asset cost allocated to expense over periods benefited

Anticipated losses if sold in the used market

Question

Accelerated depreciation is primarily used for __________.

Select one:

The financial statements of large companies

The financial statements of small companies

Income tax purposes

Both financial reporting and income taxes by most companies

Question

To measure depreciation, all of the following most be known EXCEPT __________.

Select one:

Market value

Residual value

Historical cost

Estimated life

Question

Equipment was purchased for $32,000. It has a useful life of 5 years and a residual value of $4,000. What is depreciation expense for year two under the double declining balance method?

Select one:

$5,600

$6,720

$7,680

$12,800

Question

On September 1, a machine with a useful life of 8 years and a residual value of $5,000 was purchased for $47,000. What is depreciation expense in the year of purchase under straight-line depreciation assuming a December 31 year end?

Select one:

$5,250

$5,875

$1,750

$1,958

Question

On April 1, a machine with a useful life of 4 years and a residual value of $12,000 was purchased for $87,000. What is depreciation expense for the second year under double declining balance depreciation assuming a December 31 year end?

Select one:

$21,750

$18,750

$27,188

$23,438