Property and Depreciation Quiz

What type of property can be seen or touched?

• Intangible property

• Tangible property

• Personal property

• Economic property

Which of the following is considered personal property?

• Buildings

• Land

• Trees

• Vehicles

What is the definition of 'Adjusted (cost) basis'?

• The initial cost of acquiring an asset

• The estimated value at the end of useful life

• Used to compute depreciation deductions

• The amount of capital that remains invested

What does 'Market value (MV)' refer to?

• The amount paid by a willing buyer to a willing seller

• The amount of capital that remains invested

• The initial cost of acquiring an asset

• The estimated value at the end of useful life

What is the 'Recovery period'?

• The estimated value of a property at the end of its useful life

• The number of years over which the basis of a property is recovered

• The amount of equipment that can be sold as junk

• The length of time an equipment can perform its function

Which method is known as the simplest depreciation method?

• Straight-Line Method

• Sum of the Years Digit Method

• Sinking Fund Method

• Declining-Balance Method

What does the 'Salvage value (SV)' represent?

• The annual cost of depreciation

• The estimated value at the end of useful life

• The amount of capital that remains invested

• The initial cost of acquiring an asset

Which method assumes that a sinking fund is established for replacement?

• Declining-Balance Method

• Double Declining-Balance Method

• Sinking Fund Method

• Straight-Line Method

What is the 'Physical Life of Equipment'?

• The amount of equipment that can be sold as junk

• Length of time it can perform its function

• The estimated value at the end of its useful life

• The number of years over which the basis is recovered

Which method calculates depreciation based on actual service rendered?

• Sum of the Years Digit Method

• Double Declining-Balance Method

• Straight-Line Method

• Service-Output/Production-Units Method