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14 Cards in this Set
- Front
- Back
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The cost of land includes the cost of removing unwanted buildings
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True
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Treating a capital expenditure as an expense causes an understatement of net income.
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True
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Tangible assets are assets with no physical form that have value because of the special rights they carry.
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False
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Estimated residual value is the expected cash value of an asset at the end of its useful life.
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True
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The straight-line method of depreciaion assigns a fixed amount of depreciation to each unit of output produced by an asset.
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False
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Accelerated depreciation differs from straight line depreciation in that depreciation expense is greater in the first year and less in the later years.
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True
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The units-of-production method of depreciation always writes off more of the asset's cost near the start of its useful life than the declining-balance method.
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False
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The double-declining balance method of depreciation computes annual depreciation by multiplying the asset's decreasing book value by a constant percent that is two times the straight-line rate.
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True
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For tax purposes, accelerated depreciation is generally preferable to straight-line because accelerated depreciation reduces taxable income and taxes due.
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True
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A loss on the sale of a plant asset is recorded when the sales price exceeds the book value.
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False
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A gain on the exchange of a plant asset is not recorded, but results in a smaller basis in the new asset received.
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True
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Depletion expense is the portion of a natural resource's cost used up in a particular period.
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True
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Accumulated depletion is a contra-liability account.
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False
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Goodwill is not amortized, but evaluated each year for a decline in value.
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?
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