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FARI Test 4. CH. 11
the factors that need to be determined to compute depreciation are an asset's...
cost, residual value, and service life.
the depreciable base for an asset is..
the excess of its costs over residual value.
depreciation, depletion, and amortization...
all refer to the process of allocation the cost of long-term assets used in the business over future periods.
gains on the cash sales of fixed assets...
are the excess of the cash proceeds over the book value of the assets.
the overriding principle for all depreciation methods is that the method must be...
systematic and rational.
could be a product cost or a period cost depending on the use of the asset.
assuming an asset is used evenly over a four-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year...
in the first year of an asset's life, ____ has the smallest depreciation.
the legal life of a patent is...
accounting for a change in the estimated service life of equipment...
is handled prospectively.
a change in the estimated useful life and residual value of machinery in the current year is handled as...
a prospective change from the current year through the remainder of its useful life, using the new estimates.
a change in the straight-line method of the sum of years digits method of depreciation is handled as...
a prospective change from the current year through the remainder of its useful life .
an asset should be written down if there has been an impairment of value that is..
recognition of impairment for property, plant, and equipment is required if book value exceeds...
undiscounted expected cash flows.
the amount of impairment loss is the excess of book value over..
accounting for impairment losses...
involves a two step process for recoverability and measurement.
in testing for recoverability of property, plant and equipment, an impairment loss is required if the...
asset's book value exceeds the undiscounted sum of expected future cash flows.
the manufacturing facility is...
impaired because its book value exceeds undiscounted future cash flows.
a subsequent expenditures normally is capitalized...
additions, improvements, rearreangements.
a major expenditure increased a truck's life beyond the original estimate of life. GAAP permits the expenditure to be debited to...
the replacement of a major component increased the productive capacity of production equipment from 10 units per hour to 18 units per hour. The expenditure should be debited to...
according to IFRS, the revaluation of equipment when fair value exceeds book value, results in...
an increase in accumulated other comprehensive income.
according to IFRS, biological assets are valued at...
fair value less estimated costs to sell.
according to IFRS, the level of testing for goodwill impairment is the...
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