What is the purpose of charging depreciation in accounts?
A: To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use
B: To ensure that funds are available for the eventual replacement of the asset
C: To reduce the cost of the asset in the statement of financial position to its estimated market value
D: To account for the 'wearing-out' of the asset over its life
A: To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use
B: To ensure that funds are available for the eventual replacement of the asset
C: To reduce the cost of the asset in the statement of financial position to its estimated market value
D: To account for the 'wearing-out' of the asset over its life
举一反三
- Accumulated depreciation is shown on the balance sheet as a subtraction fromthe cost of its related asset
- The expected cash value of a plant asset at the end of its useful life is known as:
- Which of the following would normally be classified as a non-current asset and which as a current asset?Petty cash A: Non-current asset B: Current asset
- The entry to record depreciation expense at the end of an accounting period( ). A: reduces the book value of the asset being depreciated B: is an example of an accrual C: reduces the balance in a contra asset acount D: increased the depreciable cost of the asset being depreciated
- Which of the following statements is FALSE? A: Depreciation is a method used for accounting and tax purposes to allocate the original purchase cost of the asset over its life. B: Sometimes the firm explicitly forecast free cash flow over a shorter horizon than the full horizon of the project or investment. C: Earnings include the cost of capital investments, but do not include non-cash charges, such as depreciation. D: Firms often report a different depreciation expense for accounting and for tax purposes.