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- The straight-line depreciation method and the double-declining-balance depreciation method: Group of answer choices Produce the same depreciation expense each year. Produce the same total depreciation over an asset's useful life. Produce the same book value each year. Are the only acceptable methods for calculating depreciation expense.Which of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.What is the double declining balance depreciation calculation? O Long-term assets that lack physical substance, and whose existence is often based on a legal contract. O An accelerated method that allocates a higher amount of depreciation expense in the earlier years of the asset's life and lower depreciation in later years O Allocating an equal amount of depreciation expense to each year of the assets service life. O The amount the company expects to receive from selling the assets at the end of its service life. ASUS f4 f5 E3 f6 f7 f8 f9 f10 f11 & 4 7 9. Y U 61 18 t6 5 LL
- Which of the following will cause a company to show a lower amount of amortization ofintangible assets in the first year after acquisition?A. A higher residual valueB. A higher amortization rateC. A shorter useful lifeIdentify the true statement: Group of answer choices The double-declining-balance method produces a decreasing annual depreciation expense over the plant asset’s life. Only the straight-line and units-of-production methods are acceptable under GAAP. Depreciation on company assets should only be recorded every other year. The straight-line method of depreciation will result in a different amount of depreciation expense being recorded for each year of the plant asset’s life.Indicate whether each of the following statements is true or false. Depreciation, depletion, and amortization all involve the allocation of the cost of property, plant and equipment (PPE) to expense. Answer An accelerated depreciation method is appropriate when the asset’s economic usefulness is the same each year Answer The declining-balance method does not deduct the residual value in computing the depreciation base. Answer
- Suppose a firm switches from straight-line depreciation to an accelerated depreciation methods (such as sum of the years digits depreciation) in the later years of some equipment's life. (a) Explain how this move would impact the firm's net income in the year of the switch? (b) Also explain which item(s) on the balance sheet would be impacted in the year of the switch and why they would be impacted this way.Many companies use an accelerated depreciation method because: A. It is required by the tax code.B. It is required by financial reporting rules.C. It yields larger depreciation expense in the early years of an asset's life.D. It yields a higher income in the early years of the asset's useful life.E. The results are identical to straight-line depreciation.Which of the statements is incorrect concerning the depreciation methods? * a. Under the output method, the cost per unit of production is constant. b. The straight-line method is particularly appropriate where the asset is expected to decline in usefulness as a function of time and the expected use pattern of the asset is fairly constant over time. c. The sum of the years' digits method provides for a decreasing depreciation charge. d. First-year depreciation under the double declining balance method is computed as the depreciable amount multiplied by double the straight line rate. . None of the choices is incorrect
- In a written down value method, the amount of depreciation _________________. a. Increases year after year b. Will be the same as book value c. Reduces year after year d. Remains the same for all the yearsIn relation to evaluating non-current assets, indicate which of the following statements is TRUE? 1. The higher the asset turnover, the more effective a company is in using its resources to generate sales. 2. Too high a depreciation rate will result in increased reported profits for the period. 3. All non-current assets must be depreciated. 4. The older the assets are, the better the company is performing.In solving for the annual cost of an asset, yearly depreciation is considered an expense. During the discussion of annual cost in class, which of the following was used to compute for the yearly depreciation? Declining Balance Method Sinking Fund Method Straight-Line Method Sum of Years' Digit Method Double Declining Balance Method
