Questions from Survey Accounting

Q: Explain straight-line, units-of-production, and

Explain straight-line, units-of-production, and double-declining-balance depreciation. When is it appropriate to use each of these depreciation methods?

Q: MalMax purchased a depreciable asset. What would be the difference in 

MalMax purchased a depreciable asset. What would be the difference in total assets at the end of the first year if MalMax chooses straight-line depreciation versus double- declining-balance depreciati...

Q: What type of account (classification) is Accumulated Depreciation?

What type of account (classification) is Accumulated Depreciation?

Q: Why is depreciation that has been recognized over the life of an

Why is depreciation that has been recognized over the life of an asset shown in a contra account? Why not just reduce the asset account?

Q: Assume that a piece of equipment cost $5,000 and

Assume that a piece of equipment cost $5,000 and had accumulated depreciation of $3,000. What is the book value of the equipment? Is the book value equal to the fair market value of the equipment?...

Q: Why would a company choose to depreciate one piece of equipment using

Why would a company choose to depreciate one piece of equipment using the double-declining- balance method and another piece of equipment using straight-line depreciation?

Q: Why may it be necessary to revise the estimated life of a

Why may it be necessary to revise the estimated life of a plant asset? When the estimated life is revised, does it affect the amount of depreciation per year? Why or why not?

Q: Emma Emerson is a proud woman with a problem. Her daughter

Emma Emerson is a proud woman with a problem. Her daughter has been accepted into a prestigious law school. While Ms. Emerson beams with pride, she is worried sick about how to pay for the school; she...

Q: How are capital expenditures made to improve the quality of a capital

How are capital expenditures made to improve the quality of a capital asset accounted for? Would the answer change if the expenditure extended the life of the asset but did not improve quality? Explai...

Q: When a long-term operational asset is sold at a gain

When a long-term operational asset is sold at a gain, how is the balance sheet affected? Is the statement of cash flows affected? If so, how?