DEPRECIATION

The only long-term asset that does not depreciate is:

• Land Improvements
• Land
• Building
• Trademarks

A company purchases a building and land for $400,000. The building is appraised for $300,000 and the land for $150,000. The cost assigned to the land should be $150,000.

• True
• False

Whatever method a business selects to calculate depreciation expense for a portion of a year, that method should be used consistently from year to year.

• True
• False

Recording an equal amount of depreciation expense for a plant asset in each year of its useful life.

• straight-line method of
  depreciation
• book value of a plant
  asset
• declining-balance
  method of depreciation
• modified half-year
  convention

The original cost of a plant asset minus accumulated depreciation.

• book value of a plant
  asset
• declining-balance
  method of depreciation
• modified half-year
  convention
• straight-line method of
  depreciation

The decrease in the value of a plant asset because of the removal of a natural resource.

• Depletion
• Real property
• Salvage value
• Asset

Costs that are incurred in a period but are both unpaid and unrecorded.

• Accrued expenses
• Accrued revenues
• Deferred expenses
• Deferred revenues