1 Chapter 9 Long-Term Assets .docx [1 41. Deprecion for tax purposes is identica

Question

1 Chapter 9 Long-Term Assets .docx [1 41. Deprecion for tax purposes is identical to depreciation for financial reporting purposes. True False 42-Federal tax law does not allow the rapid write-off of plant assets. True False 43. For tax purposes, small businesses may expense the first $2502000 of equipment expenditur s, rather than having to allocate their costs over a number of years. True False 44.. Under tax depreciation, estimated useful life and residual value must be strictly adhered to. True False 45.-Normally, depreciation calculations are based on the exact number of days the asset is held during the period True False 46. Partial-year depreciation may be rounded to the nearest whole month or the half-year convention may be used True False. 47-in accounting, depreciation means the decline in value of an asset. True False 48-Obsolescence is not a reason for an asset's limited useful life. MacBook Air

Explanation / Answer

41. False

Calculation of depreciation in both i.e. Financial and for tax purpose is different and both results in different answers for the same period.

42. False

Federal tax laws allows rapid write-off plant assets, Federal laws encourages Rapid write off

43. True

For tax purposes Federal laws allows small business men to debit first $250,000 as expense rather than allocating the cost over the no of years to help them.

44. False

45. False

According to IRS, Asset the year of depreciation starts from the date when the asset is put in use and they don’t follow the exact no. of days concept they follow the month or year rule.

46. True

As according to IRS, depreciation is not calculated on exact no. of days the asset is in use, rather than they round off the partial depreciation to nearest whole month or half year convention

47. False

Depreciation is the concept through which we allocate the cost of an asset (i.e. tangible) over its useful years.

48. False

Obsolescence has several meaning and one is No longer of use or Outdated and if the asset is of no use then there is no use of keeping it so it is false that Obsolescence is not a reason for limited useful life.

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