CH 11 NON CURRENT ASSETS DEPRECIATION PART 1

Depreciation = allocation of cost of NCA over its estimated useful life

• True

• False

Straight line method = Cost - ?? / Estimated useful life.

?? =

• selling price

• scrap value

Cost = $10000. Scrap value = $1000. Useful life = 5 years

Straight line method

• Depreciation = $2000/year

• Depreciation =

  $1800/year

Accumulated depreciation = TOTAL depreciation OVER THE YEARS

• TRUE

• FALSE

Depreciation = $2000/ year

ACCUMULATED depreciation at END of Year 2 =

• $2000

• $4000

NET BOOK VALUE = Cost - ??

?? =

• Scrap value

• ACCUMULATED depreciation

Cost = $1000. Depreciation = $2000/year.

NET BOOK VALUE at END of YEAR 2 =

• $2000

• $4000

• $6000

Depreciation = EXPENSE

• TRUE

• FALSE

ACCUMULATED depreciation =

• expense

• CONTRA asset

When NCA is depreciated:

• DR depreciation expense

  CR accumulated depreciation

• DR accumulated depreciation

  CR depreciation expense