Acc 471 chapter 11

A change in estimate should?

be handled in current and future periods.

Which of following is not a similarity in the accounting treatment for depreciation and cost depletion?

Both depreciation and depletion are based on time.

The rate of return on total assets is computed by dividing?

Net income by average total assets.

Which of the following most accurately reflects the concept of depreciation as used in accounting?

The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.

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.

Lamar Printing Company determines that a printing press used in its operations has suffered a permanent impairment in value because of technological changes. An entry to record the impairment should?

include a credit to the equipment accumulated depreciation account.

The activity method of depreciation?

is a variable charge approach.

Use of the sum-of-the-years'-digits method?

means the book value should not be reduced below salvage value.

The asset turnover ratio is computed by dividing ?

net sales by average total assets.

The term "depreciable base," or "depreciation base," as it is used in accounting, refers to?

the total amount to be charged (debited) to expense over an asset's useful life.

The most common method of recording depletion for accounting purposes is the?

units-of-production method.

If an industrial firm uses the units-of-production method for computing depreciation on its only plant asset, factory machinery, the credit to accumulated depreciation from period to period during the life of the firm will?

vary with production.