ated 15% salvage value.

at the end of its estimated use full life, the accumulated depreciation will equal
he original cost of the asset under which of the following depreciation mehtods

Straight- line NO Activity NO

Depreciation of a plant asset is the process of

allocation of the asset's cost to the periods of use

Net income is understated if, in first year, estimated salvage value is excluded from the depreciation
conputation when using

straight- line method yes and activity Yes

Depreciation is computed on the original cot minus estimated salvage value under which of the
following depreciation methods

Double- declining Balance and Activity

A) NO NO

B) NO YES

C) YES YES

D) YES NO

B) Double-declining Balance NO Activity YES

When appreciation has been recorded on property, Plant, and equipment, GAAP state that depreciation

Appreciated amounts

Which of the following statements is the assumption on which straight-line depreciation is based

A) The operating efficiencyof the asset decreases in later years

B) Service value declines as a function of time rather than use

C) Service value declines as a function of obsolescence rather than time

D)physical wear and tear are more important than economic obsolescence
Service value declines as a function of time rather than use

In which of the following situations is the activity method of depreciation most appropriate

A)an asset's service potential declines with use

B)an asset's service potential declines with the passage of time

C)An asset's is subject to rapid obsolescence

D) an asset incurs uncreasing repairs and maintenance with use

An asset's service potential declines with use

under which of the following depreciation methods is it possible for depreciation expense to be higher
in the later years of an asset's useful life

A) straight;line

B) Activity methods based on units of production

C) Sum-OF-years'-Digits

D) Declining-balance

Activity methods based on units of production

Which of the following reasons provides the best theoretical support for accelerated depreciation

A) assets are more efficient in early years and initially generate more revenue

B) Expenses should be allocated in amanner that "smooths" earnings

C) Repairs and maintenance costs will probably increase in later periods, so depreciation should decline

D) Accelerated depreciation provides easier replacement becouse of the time value of money.

Assets are more efficient in early years and initially generate more revenue

Quito Co. acquired a fixed asset with an estimated useful life of 5 years and no salvage value for $15000
at the deginning of year 1 for financial statement purposes how would the depreciation expense
calculated using the double-declining-balance method compare with that calculated using the sum-of
-the years digits method in year 1 and year to respectively

Lower and