Goals Achievement: Chapter Ten
Incidental expenditures incurred when purchasing equipment (like freight, installation, and brokerage fees) that are ordinary and necessary for the acquisition should be:
In an apportionment of the amount paid to acquire a package of assets, the amount assigned to a specific asset is based on its relative appraised value. The approach described relates to a:
Which party pays the other for the use of property?
Under which type of lease does the lessee obtain the rights to use leased property for a limited period of time and treat amounts paid as expense?
The process used to allocate the cost of long-lived assets to the accounting periods benefited is known as:
Depreciation is a process of:
The term "service life" is synonymous with:
Business growth may cause certain items of depreciable property, plant, and equipment to become deficient in their service capabilities. Such action is termed:
Asset cost minus residual value is termed:
Under the units-of-output depreciation method, the depreciable base is divided by the service life:
Under double-declining balance depreciation, salvage value is ignored in the preliminary depreciation calculation.
The straight-line method generally results in the highest possible (as compared to accelerated depreciation methods) depreciation expense during an asset's early years of usage.
In addition to a change in estimated service life, what other type of change would likely result in a revision of depreciation amounts?
The process to adjust depreciation for a change in service life entails spreading the remaining depreciable base over the remaining useful life.
The Modified Accelerated Cost Recovery System is primarily used for:
A company must utilize the same depreciation methods for financial reporting and taxes purposes.