Accounting - Study Mode
[#476] Which of the following is/are kind of depreciation expenses?
Correct Answer
(C) Both of them
Explanation
Solution: Amortization and Depletion are kind of depreciation expenses. Depreciation, depletion, and amortization (DD&A) are accounting techniques that enable companies to gradually expense resources of economic value.
[#477] In depreciation calculation, the useful life of a fixed asset is:
Correct Answer
(B) an estimate
Explanation
Solution: In depreciation calculation, the useful life of a fixed asset is an estimate. Depreciation is “the systematic and rational allocation of the acquisition cost of an asset, less its estimated salvage value or residual value, over the assets estimated useful life.” Simply said, it's a way of allocating a portion of the cost of an asset over the period it can be used.
[#478] Depreciable amount + Residual value of a fixed asset = ?
Correct Answer
(C) Cost of the fixed asset
Explanation
Solution: Depreciable amount + Residual value of a fixed asset = Cost of the fixed asset. Fixed assets are depreciated only to the extent of their depreciable amount, which equals cost minus the salvage value.
[#479] The purchase price of a software that will be used for more than 12 months should be regarded as
Correct Answer
(B) a capital expenditure
Explanation
Solution: The purchase price of a software that will be used for more than 12 months should be regarded as a capital expenditure. It is considered a capital expenditure when the asset is newly purchased or when money is used towards extending the useful life of an existing asset.
[#480] Petty cash may be used to pay . . . . . . . .
Correct Answer
(A) the expenses relating to postage and conveyance