Quizz EE ( Depreciation 1st part )

What is the Matheson formula of the remaining BV depreciated each year?

• dk = B(1-R)k-1(R)

• dk = B(1-R)k(R)

• dk = B(1-R)k+1(R)

• dk = B(1-R)k-1

How many percentages of declining balance are being used when the constant percentage is determined by R=2/N ?

• 150%

• 200%

• 100%

• 50%

Which of the following formulas is right when a 150% declining balance is being used?

• R=2/N

• R=N/2

• R=1.5/R

• R=1/N

Under which depreciation method does the amount of depreciation expenses remain the same throughout the useful life of a fixed asset?

• Reducing balance method

• Number of units produced method

• Machine hours method

• Straight-line method

Depreciation helps in determining ________

• Increases the value of the asset

• Revenue generation

•  Increase the burden of tax

• Accurate level of profit

Depreciation charged under diminishing method ________.

• Decrease every year

• Increase in one year and decrease another year

• Same every year

• Increase every year

Which are tangible personal property ?

• Driver licenses, livestock, jewelry, toys

• Equipment, jewelry, toys, light trucks

• Buses, investments, light trucks, livestock

• Toys, buses, patents, copyrights

Which of the following conditions must be met for a property to be depreciable?

• It must have a useful life of exactly one year or less.

• It must be used for personal purposes only.

• It must not lose value from natural causes

• It must be inventory, stock in trade, or investment property.

What is the primary purpose of recording depreciation in accounting ?

• To reduce income taxes

• To increase the market value of assets

• To allocate the cost of an asset over its useful life

• To enhance the liquidity of a company

Which of the following best describes how depreciation expense is calculated under the units-of-production method?

• A fixed depreciation amount is charged each year.

• Depreciation expense is a constant percentage of the asset's initial cost.

• Depreciation expense is allocated based on the number of units produced relative to the total expected units of production.

• The salvage value of the asset is deducted from its initial cost to determine depreciation.