Business and Management
Submitted By jiamei0823
The three factors in cost allocation of a depreciable asset are service life, allocation base, and allocation method. True False
The physical life of a depreciable asset sets the lower limit of its service life.
Any method of depreciation should be both systematic and rational.
Total depreciation is the same over the life of an asset regardless of the method of depreciation used.
Advocates of accelerated depreciation methods argue that their use tends to level out the total cost of ownership of an asset over its benefit period if one considers both depreciation and repair and maintenance costs.
Activity-based methods of depreciation are appropriate for assets whose service life is a function of use rather than time.
Once selected for existing assets, a company must consistently use the same method of depreciation for all subsequent fixed asset acquisitions.
One of the advantages of group and composite methods is that gains and losses on the disposal of individual assets need not be computed.
Statutory depletion is the maximum amount of depletion that may be reported in financial statements prepared according to GAAP.
10. A change in the estimated recoverable units used to compute depletion requires retroactive adjustments to the financial statements.
11. Changes in the estimates involved in depreciation, depletion, and amortization require retroactive restatement of financial statements.
12. Property, plant, and equipment and finite-life intangible assets must be tested for impairment at least once a year.
13. International Financial Reporting...