Questions from Financial Accounting

Q: How is the dictionary definition different from the accounting definition of depreciation

How is the dictionary definition different from the accounting definition of depreciation?

Q: What factors must we estimate in allocating the cost of a long

What factors must we estimate in allocating the cost of a long-term asset over its service life?

Q: What is the service life of an asset? How do we

What is the service life of an asset? How do we determine service life under the straight- line and the activity-based depreciation methods?

Q: At the end of the year, Dahir Incorporated’s balance of Allowance

At the end of the year, Dahir Incorporated’s balance of Allowance for Uncollectible Accounts is $3,000 (credit) before adjustment. The company estimates future uncollectible accounts to be $15,000. Wh...

Q: What is residual value? How do we use residual value in

What is residual value? How do we use residual value in calculating depreciation under the straight-line method?

Q: Contrast the effects of the straight-line, declining-balance

Contrast the effects of the straight-line, declining-balance, and activity-based methods on annual depreciation expense.

Q: What are the two major categories of long-term assets?

What are the two major categories of long-term assets? How do these two categories differ?

Q: Assume that Little King Sandwiches uses straight-line depreciation and University

Assume that Little King Sandwiches uses straight-line depreciation and University Hero uses double-declining-balance depreciation. Explain the difficulties in comparing the income statements and balan...

Q: Assume Little King Sandwiches depreciates a building over 40 years and University

Assume Little King Sandwiches depreciates a building over 40 years and University Hero depreciates a similar building over 20 years, and both companies use the straight-line depreciation method. Expla...

Q: Which depreciation method is most common for financial reporting? Which depreciation

Which depreciation method is most common for financial reporting? Which depreciation method is most common for tax reporting? Why do companies choose these methods?