Question

fill in the blank

Referred to as property, plant, and equipment (PP&E); plant and equipment; and _______ ________.

___________ is the process of allocating to expense the cost of a plant asset over its useful (service) life in a rational and systematic manner to those periods expected to benefit from the use of the asset. Depreciation is an _________ .

_______ _______ include land, land improvements, buildings, and equipment (machinery, furniture, tools) are resources that

_______ ___ _________ -

• Expense varies based on units of activity.
• Depreciable cost is cost less salvage value.
• Companies estimate total units of activity to calculate depreciation cost per unit.

  __________ ___________ (a.k.a. DDB)

• “Declining” annual depreciation expense per year.
• Declining-balance rate is double the straight-line rate.
• Rate applied to book value (cost less accumulated depreciation)

  __________ - ________ (the most common method)

• Expense is same amount for each year.
• Depreciable cost is the asset’s cost less its salvage value.
• Straight-line method predominates in practice.

Answer 1

Referred to as property, plant, and equipment (PP&E); plant and equipment; and fixed assets

Depreciation is the process of allocating to expense the cost of a plant asset over its useful (service) life in a rational and systematic manner to those periods expected to benefit from the use of the asset

Depreciation is an expense

Property, plant, and equipment (PP&E) include land, land improvements, buildings, and equipment (machinery, furniture, tools) are resources that are used in business operations

Double Declining Balance (a.k.a. DDB)

Straight line Depreciation Method is most common method