Chapter 9 True or False

The balance in accumulated depreciation represents the total cost that has been charged to the expense

True

The revenue producing ability of a depreciable asset will decline due to wear and tear and to obsolescence

True

Depreciation provides for the proper matching of expenses with revenues

True

Depreciation applies to three classes of plant assets: land, buildings, and equipment

False

Depreciation doesn't 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

The book value of a plant asset should approximate its fair value

False

Depreciation is a process of cost allocation, not asset valuation

True

Recognizing depreciation on an asset results in an accumulation of cash for replacement of the asset

True