VCE Accounting U2 AOS3

The use of an asset register is important for:

• Assisting with

  the calculation of depreciation

• Accessing the serial number of an asset

• Knowing the purchase date

• Records the historical value of EVERY asset

Another reason an asset register is important to a business is for:

• To provide employment for someone

• To assist in planning for maintenance or replacement

• Because it's easy to set up on a spreadshet

• to keep track of the total value of assets

Why is an asset register important in protecting assets?

• Because there's a special person responsible for the assets

• It will indicate when the annual insurance premium is due

• It details when the asset no longer is of value

• Conducting regular audits to check the asset register can prevent fraud, theft and loss.

An asset register records:

• Date of purchase and description of the asset

• Serial number and acquisition cost

• Estimated useful life, rate of depreciation and disposal details

• All of these

Why isn't the entire cost of a non-current asset reported as an expense in one reporting period?

• Because Balance Day Adjustments don't affect profit.

• Because Balance Day Adjustments don't affect the Balance Sheet

• Because the entire cost of the asset is not consumed in one period

• Because expenses are not reported in the Cash Flow Statement

Depreciation is:

• Following the Period accounting assumption

• Following the Relevance Qualitative Characteristic

• The allocation of the cost of a non-current asset over a reporting period

• The allocation of the cost of a non-current asset over its useful life

Depreciation expense means:

• The value that is reported in the Balance Sheet

• That part of the cost of a non-current asset that has been consumed in the current reporting period

• A non-current asset that has a finite life

• The value of the non-current asset's useful life.

The effect of depreciation on a firm's bank balance is:

• Increases

• Decreases

• No effect

The straight-line method of depreciation assumes:

• The depreciation calculation when shown on a graph shows a curve shape

• The depreciation calculation when shown on a graph is like a zig zag

• Depreciation amount can vary each reporting period

• That non-current assets contribute evenly to revenue, so the value is consumed evenly over its life.

"Residual value" refers to:

• the original purchase price of the non-current asset

• the estimated value of the non-current asset at the end of its Useful Life

• The estimated period of time for which the non-current will be used to earn revenue

• the total value of the asset that will b consumed by the current entity