Depreciation is a process by which a business sets aside cash to replace assets as needed. 4. Which of the following statements is true with regard to depreciation expense? Which of the following statements is true? B)Recapture is generally not required upon the gift of § 1250 property. 1. Factory maintenance is a product cost and sales commission is a period cost. d. Depreciation expense does not measure changes in market value. B. Ultrasonic vibrations have a frequency lower than the range for normal hearing. 1. it provides funds for the replacement of the asset through tax savings over the assets life. True False 2. Property, Plant, and Equipment: Depreciation and Depletion True / False Questions 1. Which of the following statements is TRUE regarding depreciation expense? 2. A. Changes the character of a loss. A)expenses will be higher and net income lower if the grant is recorded as deferred revenue. 53. b. A) Depreciation expense reflects the decrease in market value each year. It generates an after-tax cash outflow. Which of the following is true regarding depreciation recapture? None of the above is true. Computer equipment also becomes obsolete in a span of few years due to technological developments. Computer equipment for instance has better functionality in its early years. For fill-in-the-blank questions press or click on the blank space provided. Garcia sells the equipment for cash. O Only applies to ordinary assets. Depreciation is the process of determining the value of accounts receivable which will be collected in the current period. Depreciation is only an estimate of the decline in value of an asset. Depreciation is the process of recognizing revenues earned within the current accounting period. E. None of the above. A)Depreciation recapture that existed at the death of the taxpayer carries over to the beneficiaries. Accelerated depreciation will increase the Payback. Which of the following is true regarding the alternative ways to apply the income approach to accounting of resources acquired through government grants? It generates a before-tax cash outflow. D. Infrasonic vibrations are used in sonar equipment and to detect flaws in steel castings. All of these choices are correct. E. It will always cause the … The following statement is true regarding depreciation: Accelerated depreciation will increase the NPV. 3 Multiple Choice nts mo 00:32:35 Changes the character of a loss. D. It generates a before-tax cash inflow. D. Only applies to ordinary assets. a. A. It is a method that is calculated by subtracting the salvage value of the asset from the purchase prices, and then … Which of the following is statements is false regarding depreciation recapture under § 1250? Depreciation is the process of allocating the costs of long-term assets over their expected useful life. b. It is a method that is calculated by subtracting the salvage value of the asset from the purchase prices, and then dividing this number by the estimated useful life of asset. All of the above are true.e. Which of the following statements is true regarding depreciation? Consider a piece of equipment that costs $25,000 with an estimated useful life of 8 years and a $0 salvage value. C. Changes the amount of a gain. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. Which of the following is true regarding the concept of flexibility?a. Which of the following is not a section 1245 asset if held for more than one year? A. Which of the following statements is true regarding the Accumulated Depreciation account? Below is the solution for the Question Which of the following statements are true regarding straight line depreciation? Depreciation is a process of valuation. Solution for Which of the following statements is true regarding depreciation methods? Factory wages is a product cost and direct material is a period cost. B. C. It generates an after-tax cash inflow. 6.Which of the following statements about property, plant, and equipment and depreciation is true? No matter when equipment is purchased during the month, it is considered to have been purchased mid-month for MACRS depreciation purposes. 3. Which of the following is an incorrect statement regarding Bonus Depreciation? c. Depreciation is an allocation not a valuation method. It may involve modular movable even cheap equipment.d. Depreciation is an exact calculation of the decline in value of an asset. Accelerated depreciation will decrease IRR. a. Which of the following statements is most likely correct regarding the depreciation of property, plant and equipment under IFRS and U.S. GAAP? A. B. Which of the following is not one of the factors used to determine depreciation expense. Which of the following statements are true regarding straight line depreciation? B. Depreciation is a process by which a business sets aside cash to replace assets as needed. Depreciation Formula for the Straight Line Method: Depreciation Expense = (Cost – Salvage value) / Useful life . Townson’s fixed asset turnover ratio has decreased between Year 1 and Year 2. Sales commission is a product cost and depreciation on factory equipment is a product cost. The balance in the Accumulated Depreciation account represents the total amount recorded as Depreciation Expense from the time the asset was acquired. C. Depreciation is only recorded at the end of a year and never over a shorter time period. C) Depreciation expense does not measure changes in market value. a. Which of the following is not true regarding depreciation? O Changes the character of a gain. b) Accelerated depreciation will increase the Payback. Which of the following statements is true regarding depreciation methods? c. Accumulated depreciation represents a growing fund of cash. Which of the following statements is true of vibrations? a.The use of a declining balance method of depreciation will produce lower depreciation charges in the early years of an asset's life compared to the straight-line depreciation method. Depreciation allocates the cost of a fixed asset over its estimated life. It is the ability to change production rates with little penalty in time cost or customer value.b. Which of the following statements is true? a. The depreciation method selected should reflect the expected pattern of consumption of the future economic benefits embodied in the asset. A company should use the depreciation method that best matches expense recognition with the use of the asset. D. Management must know the exact life of an asset in order to calculate an acceptable depreciation expense. a) Accelerated depreciation will increase the NPV. 12. Multiple Choice. Bonus Depreciation is useful to very large businesses spending more than the Section 179 spending limit B. Depreciation is the systematic allocation of the cost or depreciable amount of an asset over its useful life. depreciated separately.. A. Businesses with a net loss in a given tax year qualify to carry-forward the Bonus Depreciation to a future year C. Bonus Depreciation only covers new equipment D. Example. B) Depreciation allocates the cost of a fixed asset over its estimated life. Depreciation is a process of valuation. Record the journal entry for the sale of the equipment if Garcia were to sell the equipment for the following amounts: … b. A. In straight-line depreciation, the expense amount is the same every year over the useful life of the asset. LO 11.5Garcia Co. owns equipment that costs $150,000, with accumulated depreciation of $65,000. It can be accomplished with sophisticated electronic equipment.c. None of the choices are correct. Neither ultrasonic nor infrasonic vibrations can be heard by humans. If you have difficulty answering the following questions, learn more about this topic by reading our Depreciation (Explanation). Here’s the answer for Which of the following statements are true regarding straight line depreciation? The auditors' approach to the audit of property, plant and equipment largely results from the fact that relatively few transactions occur. B. a.The use of a declining balance method of depreciation will produce… BELOW IS THE CORRECT ANSWER: C. Unlike U.S. GAAP, under IFRS each component of an asset must be. How many of the following statements regarding goodwill are true? C. The frequency of infrasonic vibrations is much too high to be heard by humans. Using reducing balance method to depreciate computer equipment would ensure that higher depreciation is charged in the earlier years of its operation. A. True False 3. All of the following statements are true regarding the company’s fixed asset turnover ratio except. D) Depreciation is an allocation not a valuation method. Restaurants depreciate the cost of the equipment over all the years of its useful life. Challenge Which of the following statements is true regarding depreciation methods of property, plant and equipment? Company X is going to retire equipment that is fully depreciated with Thornton Industries purchased a machine for $45,000 and is Depreciation expense reflects the decrease in market value each year. Accelerated depreciation will decrease NPV. The Accumlated Depreciation account is a cash fund to be used to replace long-lived assets. Which of the following is true regarding depreciation recapture? Sales commission is a product cost and factory rent is a period cost. Commercial real estate buildings are depreciated over 39 years using accelerated depreciation… Straight-line depreciation is the only acceptable method. Accelerated depreciation changes the total amount of depreciation taken over the life of the asset Which is NOT true regarding depreciation? d. Accumulated depreciation is the portion of an asset's cost that has already been recorded as an expense. 19. Depreciation recognizes normal wear and tear as the asset is used. B)expenses will be higher and net income lower if the grant is accounted for as an adjustment to the asset. A. Which of the following is true about the MACRS depreciation system? Impairment is an accounting principle that describes a reduction in the value of a company's asse t. Impairment is a significant and prolonged decline in value. O Changes the amount of a gain. Changes the character of a gain. Depreciation allows businesses of any kind that purchase equipment or infrastructure, such as a building or warehouse, to spread out the loss of value of the life of the asset rather than having to take the cost as an expense all at once for tax purposes. A major control procedure related to plant and equipment is a budget for depreciation. The replacement of the following statements is true regarding the Accumulated depreciation account represents the total amount as. Change production rates with little penalty in time cost or customer value.b over its estimated life the income to. Section 1245 asset if held for more than the range for normal hearing balance. If the grant is accounted for as an adjustment which of the following is true regarding depreciation of equipment the beneficiaries few transactions occur fixed asset turnover ratio decreased. And year 2 Co. owns equipment that costs $ 150,000, with Accumulated depreciation is a cost. Restaurants depreciate the cost of the following statements are true regarding the concept of?! ' approach to accounting of resources acquired through government grants reducing balance method of depreciation will increase the NPV allocation! 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