Depreciation(Quick Test #1)

1. Plant assets used in the business are reported under the heading of property, plant, and __________.

2. Plant assets other than __________ are depreciated over their useful life.

3. If a store sells its old delivery truck for cash, and the cash amount is more than its book value, a __________ is reported on the income statement.

4. An asset’s book value or carrying value is the the asset’s cost minus its __________ __________.

5. The adjusting entry for depreciation will include a debit to Depreciation Expense and a credit to __________ __________.

6. Accumulated depreciation is a contra asset account and therefore will likely have a __________ balance.

7. The depreciation methods that result in more depreciation expense in the earlier years of an asset’s life and less depreciation expense in the later years of an asset’s life are referred to as __________ depreciation methods.

8. Uniform annual depreciation expense during the life of a depreciable asset is referred to as __________–__________ depreciation.

9. It is common for the calculation of depreciation to involve two estimates: 1) the estimated __________ life, and 2) the estimated __________ value.

10. The cost of a depreciable asset is all of the costs that are __________ in order to get the asset in place and ready for __________.

11. Amounts spent to acquire property, plant and equipment are known as __________ expenditures.

12. When using the double-declining-balance method of depreciation, the estimated __________ __________ is not considered when calculating the depreciation for the early years of the asset’s life.

13. The straight-line depreciation rate for an asset with a 5-year useful life is __________%.

14. Under the double-declining-balance method, the depreciation calculation for an asset having a 10-year useful life is __________% times the asset’s __________ value at the beginning of each year.

15. Depreciation is best described as __________ __________ process that matches an asset’s cost to the periods in which it produces revenue.

16. In a given year, the amount of depreciation expense reported on a company’s tax return can be more than the amount reported on the company’s financial statements.

17. Over an asset’s useful life the total depreciation expense under the double-declining-balance method will be __________ the total amount under the straight-line method.

18. The cost of a necessary repair and the cost of routine maintenance should be charged to which type of account?

19. An asset purchased ten years ago for $100,000 has accumulated depreciation of $100,000 at the end of its tenth year. What amount should be charged to depreciation if the asset is used in its eleventh year?

20. Accumulated Depreciation is which type of an account?