Big Review -- Accounting

Front

What is the purpose of depreciation?

Back

To adjust the cost of an asset over time.

Front

Which type of depreciation is used to calculate the value of an asset over its estimated useful life? Options: Straight-line depreciation, Sum-of-the-years digits depreciation, Unit-of-production depreciation, Double-declining balance depreciation

Back

Straight-line depreciation

Front

What is the formula for straight-line depreciation? Options: Depreciation expense = (Cost - Salvage value) / Useful life, Depreciation expense = (Cost - Salvage value) x Useful life, Depreciation expense = (Cost - Salvage value) x 2 / Useful life, Depreciation expense = (Cost - Salvage value) / 2 x Useful life

Back

Depreciation expense = (Cost - Salvage value) / Useful life

Front

Which of the following is NOT an example of an intangible asset? Goodwill, Equipment, Patents, Trade names

Back

Equipment

Front

What is the purpose of the salvage value of an asset?

Back

To represent the estimated value of the asset at the end of its useful life

Front

What is the term for the value of an asset at the end of its useful life?

Back

Salvage value

Front

What is the effect of depreciation on the value of an asset?

Back

Decreases the value

Front

What does the term 'useful life' of an asset mean?

Back

The time period during which an asset is expected to be functional

Front

What is the purpose of the cost of an asset?

Back

To determine the total value of the asset

Front

Depreciation expense has a normal balance of...

Back

debit