Classifying Income & Depreciation

What is straight-line depreciation?

• A method of calculating interest on loans

• A method of figuring depreciation by dividing the original cost of an asset, less salvage value, by the asset’s life in years

• A method of increasing the value of an asset over time

• A method of calculating taxes

What does salvage value refer to?

• The cost of maintaining an asset

• The original cost of an asset

• The value of an asset after depreciation

• The market value of a depreciable asset when it is sold or removed from service

What is a loan?

• A sum of money to be paid back, typically with interest

• A type of insurance policy

• A form of investment

• A method of saving money

What is a ledger used for?

• Calculating taxes

• Managing employee records

• Logging business transactions

• Storing digital files

What is e-accounting?

• A type of loan

• A method of calculating depreciation

• Online and electronic business accounting similar to paper-based systems of accounting

• A form of investment strategy

Is the following a current or noncurrent expense?
Market Animals

• Current

• Noncurrent

• Neither

• Both

Is the following a cash or noncash exchange?

Hay given for milking with family ($125)

• Cash

• Noncash

• Neither

• Both

Is the following a variable or fixed expense?

Veterinary Services

• Variable

• Fixed

• Neither

• Both

What has the longest useful life?

• Computer & Information Systems

• Tractors

• Fence

• Breeding Animals

True or False. Current assets, used up within one year, are not depreciable.

• False

• True