Acct Ch 18
The declining-balance method of depreciation results in different amounts of depreciation expense each year.
True
The original cost of a plant asset minus accumulated depreciation is known as the book value of a plant asset.
True
Two of the factors that affect the amount of depreciation expense for a plant asset are the estimated salvage value and estimated useful life of the plant asset.
True
When plant assets are bought, the journal entry is similar to recording the buying of current assets such as supplies.
True
The monthly depreciation expense for a fax machine purchased for $700.00 with an estimated salvage value of $100.00 and useful life of five years is _________.
$10.00
If a plant asset costs $4,000,00, had acucmulated depreciation of $3,200.00,a nd is sold for $900.00, the gain or loss on disposal is ___________.
$100.00 gain
The annual depreciation expense for a fax amchine purchased for $700.00 with an estimated salvage value of $100.00 and a useful life of five years is __________.
$120.00
If a plant asset costs $700.00, has an accumulated deoreciation of $550.00, and is sold for $100.00, the gain or loss on disposal is _____________.
$50.00 loss
The total depreciation expense for a fax machine purchased for $700.00 with an estimated salvage value of $100.00 is ______.
$600.00
The journal entry to record the adjustment for office equipment depreciation is debit Depreciation Expense-Office Equipment and credit _______________.
Accumulated Depreciation - Office Equipment
Gain on plant assets is revenue that results when a plant asset is solf for more than book value.
True
Plant assets decrease in value because of use and the passage of time.
True
Personal property includes buildings but not land.
False
Revenue that results when a plant asset is sold for more than book value is known as loss on plant assets.
False
The portion of a plant asset's cost that is transferred to an expense account in each fiscal period during a plant asset's useful life is accumulated depreciation.
False
Three major types of plant assets are eqipment, buildings, and merchandise inventory.
False
To record depreciation expense for a fiscal period, the accumulated depreciation account is debited.
False
Recording a plant asset at cost is an application of the accounting concept _________.
Historical Cost
Expensing the cost of a plant asset over the plant asste's useful life is an application of the accounting concept _____________.
Matching Expenses with Revenue
A plant asset account has a normal debit balance.
True
An accounting form on which a business records information about each plant asset is a plant asset record.
True
Assessed value is the value of an assett determined by tax authorities for the purpose of calculating taxes.
True
Charging an equal amount of depreciation expense for a plant asset in each year of useful life if the stright-line method of depreciation.
True
The amount by whivh a plant asset depreciations is classified as ____________.
an expense
Depreciaiton expense for a plant asset is recorded _______________.
at the end of each fiscal period during the asset's estimated useful life
When a plan asset is sold for more than tha asset's book value, _____________.
cash received plus accumulated depreciation equals original cost plus gain on disposal
Some examples of plant assets are ___________.
cimputers, cash registers, and display cases
The journal entry to record the sale of office equipment for book value is debit Cash and ______________.
debit Accumulated Depreciation - Office Equipment; credit Office Equipment
The journal entry to record the sale of office equipment for more than the book avlue is debit Cash and ____________.
debit Accumulated Depreciation - Office Equipment; credit Office Equipment and Gain
Book value of a plant asset is original cost ____________.
minus accumulated depreciation
If a plant asset costs $1,200.00, has an acuumulated depreciation of $1,000, and is sold for $200.00, the gain or loss on disposal is _____________.
no gain or loss
The purpose of recording depreciation is to ___________.
record an expense in the periods in which the asset is used to earn revenue
When a plant asset is disposed of, a journal entry is recorded that ___________.
removes the original cosr of the plant asset and its related accumulated depreciation expense
The accumulated depreciation account should show ___________.
total depreciation for plant asstes still in use
Generally, a business removes a plant asset from use and disposes of it ___________.
when the asset is no longer usable