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