Normally, companies compute depletion on a straight-line basis.
ACCT211 Intermediate Accounting
CH 11 Quiz
Question 1Normally, companies compute depletion on a straight-line basis.
True
False
Question 2The units-of-production approach to depreciation is appropriate when depreciation is a function of time instead of activity.
True
False
Question 3Intangible development costs and restoration costs are part of the depletion base.
True
False
Question 4Impaired assets held for disposal should be reported at the lower of cost or net realizable value.
True
False
Question 5Companies frequently use the composite approach when the assets are similar in nature and have approximately the same useful lives.
True
False
Question 6Changes in estimates are handled prospectively by dividing the asset’s book value less any salvage value by the remaining estimated life.
True
False
Question 7Depreciation is based on the decline in the fair market value of the asset.
True
False
Question 8Depreciation, depletion, and amortization all involve the allocation of the cost of a long-lived asset to expense.
True
False
Question 9The major objection to the straight-line method is that it assumes the asset’s economic usefulness and maintenance repair expense are the same each year.
True
False
Question 10The declining-balance method does not deduct the salvage value in computing the depreciation base.
True
False
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