A company can opt not to take the Bonus Depreciation by completing Form 4562, Depreciation and Amortization. True False Regardless of the purchase date, MACRS sets how much depreciation can be recorded in the first year, while GAAP accounts for the purchase date.
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A company can opt not to take the Bonus
True
False
Regardless of the purchase date, MACRS sets how much depreciation can be recorded in the first year, while GAAP accounts for the purchase date.
True
False
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- Under MACRS and GAAP the acquisition cost is not fully depreciated leaving a residual value. True False 2. Regardless of the purchase date, MACRS sets how much depreciation can be recorded in the first year, while GAAP accounts for the purchase date. True False 3.A company can opt not to take the Bonus Depreciation by completing Form 4562, Depreciation and Amortization. True False 4. For buildings, MACRS, requires________________depreciation method. Sum-of-years'-digits DDB Straight-line straight-line or DDB.When using the revaluation model of accounting for PP&E assets (asset-adjustment or elimination method), a new depreciation rate must be calculated. depreciation continues to be charged in the original pattern. the related Accumulated Depreciation account is closed to OCI. the difference between fair value and book value is always debited to Revaluation Surplus (OCI).Which of the following statements is false? A For tax purposes, companies can use the MACRS depreciation method. B When you change a depreciation estimate, such as salvage value, you need to make an adjustment to retained earnings. C If the expected future cash flow is less than the carrying amount, the asset is considered impaired. D If an impairment loss is recorded, depreciation must be recalculated since the book value changed.
- Which of the following statements is false? A For tax purposes, companies can use the MACRS depreciation method. B When you change a depreciation estimate, such as salvage value, you need to make an adjustment to retained earnings. C If the expected future cash flow is less than the carrying amount, the asset is considered impaired. D If an impairment loss is recorded, depreciation must be recalculated since the book value changed. The answer A is wrongWhich of the following statements is not correct? Multiple Choice The cost less the salvage value equals the depreciable base of a long-term asset. Uncollectible Accounts Expense is a contra asset account. If a firm records prepaid expense items in an expense account when they pay for them, their adjustment at the end of the period to record the unexpired portion would include a debit to an asset account and a credit to an expense account. Each adjustment for an accrued expense includes a credit to a liability account.A company wishes to report the highest earnings possibleaccording to GAAP. Therefore, when calculating depreciation for financial reporting purposes,a. It will follow the MACRS depreciation rates prescribedby the IRS.b. It will estimate the shortest lives possible for itsassets.c. It will estimate the longest lives possible for its assets.d. It will estimate lower residual values for its assets.
- One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant & equipment subsequent to initial recognition. Read IAS 16 and answer the following questions. Provide a list of the references you have used to search this topic. 1) What are the accounting models accepted under IFRS for the measurement of property, plant & equipment subsequent to initial recognition? 2) How often should the company revalue its property, plant & equipment under the revaluation model? 3) How should the revaluation gains and losses be accounted for and reported in the financial statements? 4) How should any claim for compensation from third parties for impairment be accounted for? 5) How should the recoverability of the carrying amount of property, plant & equipment be accounted for?Which of the following statements related to long-lived assets is true? Depreciation is calculated the same for financial reporting purposes and income tax purposes. If a company changes a depreciation estimate, it does not require a prior period adjustment. Depreciation is the process to value an asset at its fair market value. There is only one test to record an asset's impairment.Which of the following companies has a disclosure for which FASB ASC 450 applies, but FASB ASC 275 does not? O Comfort House has a loss contingency at the financial statement date, and it is remotely A. possible that the estimate for this contingency will change by a material amount within the next year. B. The Garden Foundation has an asset on which the depreciation will be recalculated due to the life of the assets being extended. C. The Summer Group has equipment that will be written down. D. The Winter Group has an intangible asset that needs to be written down.
- Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.For financial accounting purposes, depreciation expense represents the decreasein an asset's fair market value. Select one: True False The total amount of depreciation taken over the life of a depreciable asset should be less if the double-declining balance depreciation method is used than if the straight-line method is used. Select one: True FalseTrue or False 1. When there is a change in the plan to sell a held for sale asset, that asset is reclassified back to its previous classification and measured at its carrying amount before it was classified as held for sale, adjusted for any depreciation, amortization or revaluation that would have been recognized had the asset not been classified as held for sale. 2. Profit from continuing operation does not include extraordinary items, discontinued operations, or cumulative effects of changes in accounting principles. 3. A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. 4. A component of an entiry can be cash generating unit or group of cash generating units. Use the following information for the next two questions: An entity, a brewer of beer, has three major product lines - Brand A, Brand B and Brand C. Each product line comprises…