Ch15

Question 1

Depreciation

Answer 1

Allocation of the cost of a non-current asset over its life

Question 2

Cost of an Asset

Answer 2

Purchase Price of an Asset

All other costs incurred to get asset into a revenue earning capacity

Question 3

Straight-Line method

Answer 3

method of depreciation that allocates the same amount of depreciation every reporting period, regardless of the age of the asset

Question 4

Accumulated depreciation

Answer 4

Total amount of depreciation that has been written off from the date the asset came under the control of the business until present time

Question 5

Depreciation - Period Assumption

Answer 5

Follows period assumption as the life of a business is divided into periods of time, and the assets value is spread across those periods

Question 6

Depreciation - Accrual basis assumption

Answer 6

Follows as depreciation incurred for that period is matched against the revenue earned for that period

Question 7

Depreciation Account

Answer 7

Accumulated depreciation of … - Debit

P&L Summary - Credit - is balance of Accumulated depreciation of …

Question 8

Accumulated depreciation of … Account

Answer 8

Depreciation of … - Credit

Balance - Total amount of depreciation - Debit

Question 9

Depreciation - Balance Sheet

Answer 9

Non-Current Assets
Vehicle
Less accumulated depreciation of

Question 10

Calculating Straight-Line Depreciation

Answer 10

Cost - Residual Value / Estimated Life

Question 11

Depreciation expense

Answer 11

Amount of depreciation written off as an expense for one particular period

Question 12

Depreciation - QC

Answer 12

Never satisfies verifiability as cannot be checked by or verified by business documents