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WorksheetsUnderstanding Depreciation Concepts
Total questions: 20
Worksheet time: 11mins
A method that equally distributes the depreciation expense over an asset’s estimated useful life.
Accelerated Depreciation
Straight Line Depreciation
Double Declining Balance Depreciation
Sum of the Years Digit Depreciation
What is the term for the value of an asset at the end of its useful life?
Salvage value
Residual value
Depreciated value
Book value
What is the effect of depreciation on the value of an asset?
Increases the value
Decreases the value
No effect on the value
Depends on the type of asset
Which of the following is a formula for calculating Straight-Line Depreciation?
Useful LifeCost−Salvage Value
Cost×Depreciation Rate
Total Estimated UnitsUnits Produced×(Cost−Salvage Value)
Cost−Accumulated Depreciation
What is the formula to find the asset book value?
What is the primary purpose of recording accumulated depreciation?
To increase the asset's market value
To track the reduction in asset value over time
To calculate the asset's salvage value
To determine the asset's purchase price
If I buy equipment on account, what are my debits and credits?
What two factors are needed in order to find the amount of annual depreciation expense
LIFO
FIFO
estimated salvage value
useful life on plant asset
Why do we depreciate assets?
They decline in value over time!
They become obsolete over time!
Wear and tear makes them less valuable!
All of the Above!
What are the two methods of depreciation we discussed in class? (select 2 answers)
Straight Line
Reducing increasing balance
Double declining balance
Years of Service deductions
What is one advantage of the double declining balance method?
Most of the depreciation happens later in the asset's life
Depreciation is consistent
More of the depreciation happens early in the asset's life
It eliminates all depreciation.
What is one advantage of the straight line method?
Most of the depreciation happens later in the asset's life
Depreciation is consistent
More of the depreciation happens early in the asset's life
It eliminates all depreciation.
Two * Straight-line rate
Straight-Line
Units-of-Production
Declining-Balance
The book Value is
Cost
Cost - SV
Cost - Dep Exp
Cost - Acc Dep
Cost-SV / Useful life in period
Straight-Line
Units-of-Production
Declining-balance
A temporary account...
Depreciation expense has a normal balance of...
Which of the following does NOT depreciate?
Buildings
Machinary
Land
