Reference no: EM1310384

1. The activity method of depreciation
A.Is a variable charge approach.
B.Assumes that depreciation is a function of the passage of time.
C.Conceptually associates cost in terms of input measures.
D.All of these.

2.For income statement purposes, depreciation is a variable expense if the depreciation method used is
A.Units-of-production.
B.Straight-line.
C.Sum-of-the-years'-digits.
D.Declining-balance.

3.Use of the double-declining-balance method
A.Results in a decreasing charge to depreciation expense.
B.Means salvage value is not deducted in computing the depreciation base.
C.Means the book value should not be reduced below salvage value.
D.All of these.

4.Use of the sum-of-the-years'-digits method
A.Results in salvage value being ignored.
B.Means the denominator is the years remaining at the beginning of the year.
C.Means the book value should not be reduced below salvage value.
D.All of these.

5.A graph is set up with "yearly depreciation expense" on the vertical axis and "time" on the horizontal axis. Assuming linear relationships, how would the graphs for straight-line and sum-of-the-years'-digits depreciation, respectively, be drawn?
A.Vertically and sloping down to the right
B.Vertically and sloping up to the right
C.Horizontally and sloping down to the right
D.Horizontally and sloping up to the right

6.Costs incurred internally to create intangibles are
A.Capitalized.
B.Capitalized if they have an indefinite life.
C.Expensed as incurred.
D.Expensed only if they have a limited life.

7.Which of the following methods of amortization is normally used for intangible assets?
A.Sum-of-the-years'-digits
B.Straight-line
C.Units of production
D.Double-declining-balance

8.The cost of an intangible asset includes all of the following except
A.Purchase price.
B.Legal fees.
C.Other incidental expenses.
D.All of these are included.

9.Factors considered in determining an intangible asset's useful life include all of the following except
A.The expected use of the asset.
B.Any legal or contractual provisions that may limit the useful life.
C.any provisions for renewal or extension of the asset's legal life
D.The amortization method used.