Depreciation and Amortization Quiz

Which of the following assets is typically NOT depreciated?

• Buildings

• Equipment

• Land

• Vehicles

Which of the following is NOT a common method for calculating depreciation?

• Straight-line method

• Declining-balance method

• First-in, first-out method

• Fixed installment method

The Fixed installment method is the other name of which type of depreciation method?

• Straight-line method

• Written down method

• Accelerated

• Units-of-production

Amortization is an accounting concept similar to depreciation, but it applies to which type of assets?

• Intangible assets, such as patents and copyrights.

• Natural resources, such as oil and timber.

• Tangible assets, such as machinery and buildings.

• Current assets, such as cash and accounts receivable.

Depreciation is to tangible assets as depletion is to:

• Intangible assets

• Financial assets

• Natural resources

• Real estate

Which of the following is true regarding the salvage value (scrap value) of an asset?

• It must be a positive value.

• It is the book value of the asset at the end of its useful life.

• It is the estimated market value of the asset at the time of purchase.

• It must be higher than the initial cost of the asset.

Which of the following is an example of an intangible asset that would be amortized rather than depreciated?

• Office Building

• Delivery Truck

• Patent

• Factory Equipment

Which of the following is a key difference between tangible and intangible assets?

• Tangible assets are always more valuable than intangible assets.

• Only tangible assets are recorded on a company's balance sheet.

• Intangible assets are depreciated, and tangible assets are amortized.

• Intangible assets are physically non-existent, while tangible assets have physical substance.

A company develops a new type of software and capitalizes the development costs. The software is expected to be useful for 5 years. This asset would be subject to:

• Amortization

• Depreciation

• Depletion

• Impairment only

Which of the following is an example of a Nominal Account?

• Cash Account

• Building Account

• Creditor Account

• Rent Expense Account