Depreciation is an accounting expense b. Depreciation is a cash flow c. The pref

Question

Depreciation is an accounting expense b. Depreciation is a cash flow c. The preferred method of depreciation is usually the accelerated d. Sub-Chapter S Corporations are taxed like a partnership e. A limited partnership provides the liability protection of a corporation f. The cycles of 2 types of equipment are sufficient to determine the number of each to be used on a heavy construction job g. The capacities of 2 types of equipment arc sufficient to determine the number of each to be used on a heavy construction job h. The competitively bid contract is the best way to manage fast track construction i. Design-Build Contracts can lead to a Guaranteed maximum Price around 30% design completion j. Conceptual estimating is based on crew productivity k. Detailed estimating is based on a price per square foot of each major cost category l. The Swell factor of the earth material influences the number of trucks needed to complete a task

Explanation / Answer

a) Yes

The accounting entry is to debit the depreciation account and credit accumulated depreciation account.

b) No

When we prepare the cash flow statement from Net Income statement, we again add back depreciation to offset the initial depreciation deduction which was done while making income statement.

c) Yes

Accelerated depreciation method is to let the companies write off their assets faster in the earlier years than the later years. This is a preferred method currently adopted by large number of companies. In United States the two allowed methods of depreciation (ACRS and MACRS) are both accelerated depreciations.

d) No

Sub chapter S corporations are called closely held corporations, not partnership for the tax purposes.

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