L17

Question 1

DEPRECIATION?

Answer 1

• lost in the value of
  -an asset over time

Question 2

2 causes of Depreciation

Answer 2

1- Physical Condition of Asset

2- Functional Condition

Question 3

4 Examples of Physical Condition of Asset
Paw.NM

Answer 3

1- Wear x Tear (spedometer)

2- Physical Decay ( rusty car)

3- Accident (bumped car)

4- ( neglect to maintain)

Question 4

2 causes of Functional Condition

Answer 4

• no longer serves a need
• abandoned silos not used anymore
  -not practical anymore

Question 5

2 causes of Functional Condition

Answer 5

• inadequacy
• obsolescence

Question 6

GIVE EXAMPLES OF AN ASSET

Answer 6

• CAR
• HOUSE
• GARDGETS (LAPTOP, CELLPHONE)

Question 7

3 THINGS YOU NEED TO CALCULATE DEPRECIATION

Answer 7

1- INITIAL COST (KNOWN X EXCLUDES LAND)

2- USEFUL LIFE ( UNKNOWN X ESTIMATED)

3- SALVAGE VALUE (UNKNOWN X ESTIMATED

Question 8

2 METHODS YOU CAN TO CALCULATE DEPRECIATION

Answer 8

1- STRAIGHT LINE METHOD (MOST COMMON X SIMPLEST)

2- DECLINING BALANCE

Question 9

USEFUL LIFE

Answer 9

how many years are you gonna use an item?

Question 10

INITIAL COST

Answer 10

WHAT DID YOU PAY IN THE VERY BEGINNING TO GET IT

Question 11

SALVAGE VALUE

Answer 11

HOW MUCH ARE YOU GONNA GET WHEN YOU SELL THAT CAR AFTER 5 YRS

Question 12

TRUE OR FALSE? DOES LAND DEPRECIATE?

Answer 12

NO, LAND BARELY DEPRICIATES IN VALUE