21 which one of the following statements is not true a depreciation is the process o 4313822

21 which one of the following statements is not true a depreciation is the process o 4313822

21.Which one of the following statements is not true?

a.Depreciation is the process of allocating the purchase price of an asset minus its residual value to expense for each period benefited by the asset.

b.The cost of an asset includes all acquisition costs necessary to obtain the benefits to be derived from the asset.

c.The service life of an asset is the measure of the number of years of service expected from the asset before its disposal.

d.The residual value of an asset is the difference between the expected book value of the asset at the end of its service and the costs of disposal.

22.The service life of an asset may be measured by all of the following except

a.units of output

b.units of activity

c.units of input

d.units of time

23.What type of cost allocation must a company use?

a.systematic

b.rational

c.systematic and rational

d.systematic, rational, and reliable

24.Which one of the following is not a factor that limits the service life of an asset?

a.operational use

b.replacement value

c.deterioration as a function of time

d.Obsolescence

25.The factors involved in computing periodic depreciation charges for an asset do not include the

a.method of cost allocation

b.current value of the asset

c.service life

d.residual value of the asset

26.Which of the following is not a factor in computing depreciation for a period?

a.method of cost allocation

b.service life

c.present value

d.residual value

27.How can service life be measured?

a.units of time

b.units of activity

c.units of output

d.All of the above answer choices can be used to measure service life.

28.What determines residual value?

a.company policy

b.GAAP for each class of asset

c.IFRS

d.FASB

29.Depreciation of an asset based on the number of hours of usage is a(n)

a.time-based method

b.accelerated method

c.replacement method

d.activity-based method

30.Which depreciation method ignores residual value when computing the depreciable base of an asset?

a.sum-of-the-years'-digits method

b.double-declining-balance method

c.composite method

d.group method

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