FAR — Financial Accounting & Reporting — Quiz 49

Questions in this quiz (10)

1. Which account records the total depreciation of an asset over time?

   • Depreciation expense
   • Accumulated depreciation
   • Equipment expense
   • Asset valuation

2. Which financial statement includes depreciation expense?

   • Balance sheet
   • Income statement
   • Statement of cash flows
   • Statement of retained earnings

3. Where is accumulated depreciation reported?

   • Income statement
   • Balance sheet
   • Statement of retained earnings
   • Statement of cash flows

4. Which depreciation method results in higher expense in early years?

   • Straight-line method
   • Double-declining balance method
   • Units-of-production method
   • FIFO method

5. Which depreciation method is based on asset usage?

   • Straight-line method
   • Double-declining balance
   • Units-of-production
   • FIFO

6. What does salvage value represent?

   • Original cost of asset
   • Estimated value at end of useful life
   • Total depreciation recorded
   • Market value today

7. What occurs when a company removes an asset from its records?

   • Asset acquisition
   • Asset disposal
   • Asset capitalization
   • Asset depreciation

8. Which account is debited when recording depreciation?

   • Depreciation expense
   • Accumulated depreciation
   • Equipment
   • Cash

9. Which account is credited when recording depreciation?

   • Cash
   • Accumulated depreciation
   • Equipment
   • Revenue

10. Which accounting principle supports allocating asset costs over time?

    • Matching principle
    • Conservatism principle
    • Revenue recognition principle
    • Cost principle