Accounting Chapter 18

A plant asset account has a normal debit balance.

• True

• False

Three major types of plant assets are equipment, buildings, and merchandise inventory.

• True

• False

Assets expected to be exchanged for cash or consumed within a year are known as plant assets.

• True

• False

Cash is a plant asset

• True

• False

Estimated total depreciation expense is calculated as original cost less estimated salvage value.

• True

• False

Charging an equal amount of depreciation expense for a plant asset in each year of useful life is the straight-line method of depreciation.

• True

• False

As depreciation expense is recorded for a plant asset, the original cost of the asset is decreased in the account.

• True

• False

The original cost of a plant asset minus accumulated depreciation is known as the book value of a plant asset.

• True

• False

Two of the factors that affect the amount of depreciation expense for a plant asset are the estimated salvage value and estimated useful life of the plant asset.

• True

• False

Plant assets decrease in value because of use and the passage of time.

• True

• False