Depreciation is a process allocating the cost of an asset ovw its useful life Bo

Question

Depreciation is a process allocating the cost of an asset ovw its useful life Book value represents the cost of an asset less accumulated depreciation Natural resources are not subject to depreciation but are subject to depletion A capital budget is a management tool to assist them in the timing and financing of property plant & equipment The formula for the double-declining balance method of depreciation is Remaining book value times the straight line rate is equal to depreciation expense The term plant assets refer to long-lived assets acquired for use in business operations, rather than for resale to customers Sales tax on equipment is not part of the acquisition cost and should not be capitalized Land improvements are not subject to depreciation Management determines the accounting policy for depreciation including method and estimated useful life.

Explanation / Answer

1) True

2) True

3) False ( Entry is Depreciation dr to Acc Depreciation)

4)`True

5) True

6) True

7) True

8) True

9) True

10) True

11) True

12) False

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