Depreciation
The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence.
True
The book value of a plant asset should approximate its fair value.
False
Depreciation applies to three classes of plant assets: land, buildings, and equipment.
False
Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time.
False
Depreciation expense and accumulated depreciation are reported on the income statement.
False
Four factors affect the computation of depreciation: cost, useful life, salvage value, and residual value.
False
Recognizing depreciation on an asset results in an accumulation of cash for replacement of the asset.
False
Depreciation is a process of asset valuation, not cost allocation.
True
Depreciation provides for the proper matching of expenses with revenues.
True
The balance in accumulated depreciation represents the total cost that has been charged to expense since placing the asset in service.
True