ACING MBA 510 FINAL EXAM WITH THE LATEST A+ QUESTIONS
AND ANSWERS STUDY COMPANION.
_ is the process of allocating the cost of a plant asset to expense while it is in
use.
depreciation
Depreciation Expense is reported on which of the following financial statements?
income statement
The factors necessary to compute depreciation include (cost/selling price/market
value), salvage value and useful life.
cost
______ value, also called residual value or scrap value, is an estimate of the
asset's value at the end of its useful life.
salvage
Accumulated depreciation is a asset account (one that is linked with the plant
asset account, but has an opposite normal balance) and is reported on the
balance sheet.
contra
The ______ life of a plant asset is the length of time it is productively used in a
company's operations
useful
Accumulated depreciation is reported on which of the following financial
statements?
balance sheet
Straight-line depreciation can be calculated by taking:
(cost minus salvage value)/useful life
On January 2, Dice Co. purchases a mixing machine for $25,500. The machine is
expected to last four years and have a salvage value of $5,500. Assuming the
company uses the straight-line method, depreciation expense should be
$_______ per year.
5000
,Which of the following items related to depreciating equipment would be found
on a company's income statement?
Depreciation Expense - Equipment
Which of the following factors determine depreciation?
Salvage value
Useful life
Cost of asset
Arc Co. purchased a piece of equipment for $25,000. At the end of the year, the
book value of the equipment is $12,000. The salvage value is 0. How much is
accumulated depreciation, using the straight-line method, at the end of the
period?
13,000
25,000-12,000 =13,000
Accumulated depreciation is recorded on which of the following financial
statements?
Balance sheet
Depreciation expense is reported as a decrease on which of the following
financial statements?
income statement
The asset's acquisition costs less its accumulated depreciation is called:
book value
On January 3, ATA Company purchases a copy machine for $11,500. The
machine is expected to last five years and have a salvage value of $1,500.
Compute depreciation expense for the first year, assuming the company uses the
straight-line method.
2000
The method of depreciation that charges a varying amount to depreciation
expense for each period depending on its usage is called the _____ method.
units-of-production
, Ring Co. owns a delivery van that was purchased two years ago for $25,000. Ring
has depreciated the van for two years at a straight-line amount of $4,000 per year.
The book value of this van at the end of the second year would be $_________.
17000
Nimo Co. purchased a machine for $12,000 and estimates it will use the machine
for five-years with a $2,000 salvage value. Using the double declining-balance
depreciation method, compute the machine's first year depreciation expense.
48000
12,000 x [(100%/5) x 2] =4,800. Salvage value is not subtracted upfront with this
method.
Book value can be calculated by taking an asset's acquisition costs less its
_________.
accumulated depreciation
Grand Co. owns one copier that was purchased for $10,000 three years ago. The
depreciation expense taken on the copier each year has been $2,700; $1,800; and
$2,200, based on the number of copies that have been made on the copier. Based
on this information, the company uses the ______ depreciation method.
units-of-production
The depreciation method that determines the depreciation for the period by
multiplying a depreciation rate (often twice the straight-line rate) by the asset's
beginning-period book value is known as the ______ method.
declining-balance
Juno Co. purchased a machine for $10,000 and estimates it will use the machine
for four years with a $2,000 salvage value. Using the double declining-balance
depreciation method, compute the machine's first year depreciation expense.
$5000
$10,000 x (.25 x 2) = $5,000.
Bina Co. purchased a machine on January 1st for $15,000 and estimates it will
use the machine for three years with a $3,000 salvage value. Bina estimates that
they will produce 1,500 units during year one, 1,000 units during year two, and
AND ANSWERS STUDY COMPANION.
_ is the process of allocating the cost of a plant asset to expense while it is in
use.
depreciation
Depreciation Expense is reported on which of the following financial statements?
income statement
The factors necessary to compute depreciation include (cost/selling price/market
value), salvage value and useful life.
cost
______ value, also called residual value or scrap value, is an estimate of the
asset's value at the end of its useful life.
salvage
Accumulated depreciation is a asset account (one that is linked with the plant
asset account, but has an opposite normal balance) and is reported on the
balance sheet.
contra
The ______ life of a plant asset is the length of time it is productively used in a
company's operations
useful
Accumulated depreciation is reported on which of the following financial
statements?
balance sheet
Straight-line depreciation can be calculated by taking:
(cost minus salvage value)/useful life
On January 2, Dice Co. purchases a mixing machine for $25,500. The machine is
expected to last four years and have a salvage value of $5,500. Assuming the
company uses the straight-line method, depreciation expense should be
$_______ per year.
5000
,Which of the following items related to depreciating equipment would be found
on a company's income statement?
Depreciation Expense - Equipment
Which of the following factors determine depreciation?
Salvage value
Useful life
Cost of asset
Arc Co. purchased a piece of equipment for $25,000. At the end of the year, the
book value of the equipment is $12,000. The salvage value is 0. How much is
accumulated depreciation, using the straight-line method, at the end of the
period?
13,000
25,000-12,000 =13,000
Accumulated depreciation is recorded on which of the following financial
statements?
Balance sheet
Depreciation expense is reported as a decrease on which of the following
financial statements?
income statement
The asset's acquisition costs less its accumulated depreciation is called:
book value
On January 3, ATA Company purchases a copy machine for $11,500. The
machine is expected to last five years and have a salvage value of $1,500.
Compute depreciation expense for the first year, assuming the company uses the
straight-line method.
2000
The method of depreciation that charges a varying amount to depreciation
expense for each period depending on its usage is called the _____ method.
units-of-production
, Ring Co. owns a delivery van that was purchased two years ago for $25,000. Ring
has depreciated the van for two years at a straight-line amount of $4,000 per year.
The book value of this van at the end of the second year would be $_________.
17000
Nimo Co. purchased a machine for $12,000 and estimates it will use the machine
for five-years with a $2,000 salvage value. Using the double declining-balance
depreciation method, compute the machine's first year depreciation expense.
48000
12,000 x [(100%/5) x 2] =4,800. Salvage value is not subtracted upfront with this
method.
Book value can be calculated by taking an asset's acquisition costs less its
_________.
accumulated depreciation
Grand Co. owns one copier that was purchased for $10,000 three years ago. The
depreciation expense taken on the copier each year has been $2,700; $1,800; and
$2,200, based on the number of copies that have been made on the copier. Based
on this information, the company uses the ______ depreciation method.
units-of-production
The depreciation method that determines the depreciation for the period by
multiplying a depreciation rate (often twice the straight-line rate) by the asset's
beginning-period book value is known as the ______ method.
declining-balance
Juno Co. purchased a machine for $10,000 and estimates it will use the machine
for four years with a $2,000 salvage value. Using the double declining-balance
depreciation method, compute the machine's first year depreciation expense.
$5000
$10,000 x (.25 x 2) = $5,000.
Bina Co. purchased a machine on January 1st for $15,000 and estimates it will
use the machine for three years with a $3,000 salvage value. Bina estimates that
they will produce 1,500 units during year one, 1,000 units during year two, and
