Chapter 10 T/F

Patents are exclusive rights to manufacture, use, or sell a particular product or process

True

Regardless of the depreciation method, the amount that will be depreciated during the life of the asset will be the same.

True

Residual value is NOT incorporated in the initial calculations for double-declining-balance depreciation

True

The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use.

True

The cost of computer equipment does NOT include the consultant's fee to supervise installation of the equipment

True

The double declining balance depreciation method calculates depreciation each year by taking twice the straight line rate times the book value of the asset at the beginning of each year.

True

The double-declining-balance method is an accelerated depreciation method.

True

The transfer to expense of the cost of intangible assets attributed to the passage of time or decline in usefulness is called amortization.

True

The units of production depreciation method provides a good match of expenses against revenue.

True

The cost of repairing damage to machine during installation is debited to a fixed asset account

False

The normal balance of the accumulated depreciation account is debit.

False

It is necessary for a company to use the same depreciation method for all of its depreciable assets.

False

Revising depreciation estimates does affect the amounts of depreciation expense recorded in past periods.

False

The book value of a fixed asset reported on the balance sheet represents its market value on that date

False

An estimate of the amount which an asset can be sold at the end of its useful life is called residual value

True