Question

1.assets classified as property plant and equipment are reported at?

A. each asset's estimated market value at the balance sheet date less depreciation

B. each asset's estimated market value at the balance sheet date

C. the estimated salvage value at the balance sheet date

D. each asset's original cost less depreciation since acquisition

2. depreciation is

A. an effort to achieve proper matching of the cost of operating assets with related revenues

B. an accumulation of funds to replace the related plant assets

C. the difference between the original cost and salvage value of an asset

D. the cash allocated each period to maintain a plant asset

3. if technology changes rapidly a firm should

A. expense plant assets immediately because of the uncertainly of future benefits

B. depreciate plant assets over long periods of time

C. consider an accelerated rate of depreciation

D. use the straight line method of depreciation as it is the easiest

4. A company should choose a depreciation method that

A. best allocates the original cost of the assets to the periods benefited by the use of the asset

B. saves the most taxes

C. minimizes net income

D. shows the highest amount of net income

Answer 1

1. Option D each asset's original cost less depreciation since acquisition at the reporting date.

2.depreciation is an effort to achieve proper matching of cost of the operating asset with related revenues. Option A

3 option C if a techinology changes rapidly a firm should consider an accelerated rate of depreciation.

4. Option A A comoaco should choose a depreciation method that best allocates the original cost of the asset to the period benefited by the use of the asset.

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