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.
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.
举一反三
- 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
- Which of the following statement is not true? A: The initial investment in working capital is a cash outflow at the ending of the project for items such as inventories B: Working capital is recaptured at the end of the project when working capital is no longer required C: Depreciation is not a current cash outflow. D: Discounted cash flow methods automatically provide for a return of the original investment, thereby making a deduction for depreciation unnecessary
- The term accumulated depreciation, as used in accounting, is best defined as A: the portion of a plant asset recognized as expense since the asset was acquired. B: funds (or cash) set aside to replace the asset being depreciated. C: earnings retained in the business that will be used to purchase another asset when the present asset is depreciated. D: an expense of doing business.
- Total depreciation expense over an asset's useful life will not be identical under all methods of depreciation.
- Total depreciation expense over an asset's useful life will not be identical under all methods of depreciation. A: 正确 B: 错误