Depreciation, Impairments and Depletion
CHAPTER 11
DEPRECIATION, IMPAIRMENTS, AND DEPLETION
TRUE-FALSE—Conceptual
Answer
T F T T F F T F F T T F T F T T F T F T
No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20
Description
Nature of depreciation. Nature of depreciation. Depreciation, depletion, and amortization. Definition of depreciation base. Factors involved in depreciation process. Definition of inadequacy. Objection to straight-line method. Units-of-production approach. Accelerated depreciation method. Declining-balance method. Group or composite approach. Use of the composite approach. Accounting for changes in estimates. Computation of impairment loss amount. First step in determining an impairment. Reporting impaired assets held for disposal. Method used to compute depletion. Costs included in depletion base. Computing asset turnover ratio. Profit margin on sales ratio.
MULTIPLE CHOICE—Conceptual
Answer
d b c b a a d a a d d c c b b d
No.
21. 22. 23. S 24. S 25. P 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36.
Description
Knowledge of depreciation accounting. Conceptual rationale for depreciation accounting. Depreciation and retaining funds. Definition of depreciation. Service life vs. physical life. Definition of depreciable cost. Economic factors affecting useful service life. Activity method of depreciation. Units-of-production method of depreciation. Units-of-production method of depreciation. Knowledge of double-declining balance method. Components of sum-of-the-years'-digits method. Graphic depiction of straight-line and sum-of-the-years'-digits methods. Disadvantage of using straight-line method. Group method of depreciation. Identification of composite life.
11 - 2
Test Bank for Intermediate Accounting, Twelfth Edition
MULTIPLE CHOICE—Conceptual (cont.)
Answer
c c b c b b d a d d c b b d d c d c
P S
No.
P S
Description
Group method of depreciation. Composite or group depreciation. Depreciation for part year. Change in
DEPRECIATION, IMPAIRMENTS, AND DEPLETION
TRUE-FALSE—Conceptual
Answer
T F T T F F T F F T T F T F T T F T F T
No.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20
Description
Nature of depreciation. Nature of depreciation. Depreciation, depletion, and amortization. Definition of depreciation base. Factors involved in depreciation process. Definition of inadequacy. Objection to straight-line method. Units-of-production approach. Accelerated depreciation method. Declining-balance method. Group or composite approach. Use of the composite approach. Accounting for changes in estimates. Computation of impairment loss amount. First step in determining an impairment. Reporting impaired assets held for disposal. Method used to compute depletion. Costs included in depletion base. Computing asset turnover ratio. Profit margin on sales ratio.
MULTIPLE CHOICE—Conceptual
Answer
d b c b a a d a a d d c c b b d
No.
21. 22. 23. S 24. S 25. P 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36.
Description
Knowledge of depreciation accounting. Conceptual rationale for depreciation accounting. Depreciation and retaining funds. Definition of depreciation. Service life vs. physical life. Definition of depreciable cost. Economic factors affecting useful service life. Activity method of depreciation. Units-of-production method of depreciation. Units-of-production method of depreciation. Knowledge of double-declining balance method. Components of sum-of-the-years'-digits method. Graphic depiction of straight-line and sum-of-the-years'-digits methods. Disadvantage of using straight-line method. Group method of depreciation. Identification of composite life.
11 - 2
Test Bank for Intermediate Accounting, Twelfth Edition
MULTIPLE CHOICE—Conceptual (cont.)
Answer
c c b c b b d a d d c b b d d c d c
P S
No.
P S
Description
Group method of depreciation. Composite or group depreciation. Depreciation for part year. Change in