Question :
71. Delta Company has some assets that provide more and better : 1230695
71. Delta Company has some assets that provide more and better services in the early years of their lives and require increasing amounts of maintenance as they grow older. The _____ method(s), which recognize larger depreciation charges in early years and smaller depreciation charges in later years, can be justified.
A. declining-balance
B. accelerated depreciation
C. sum-of-the-years’-digits
D. all of the above
E. none of the above
72. If permitted a choice of depreciation methods for tax reporting, a firm should try to maximize the amount of the
A. reductions in tax payments from claiming depreciation.
B. present value of the reductions in tax payments from claiming depreciation.
C. future value of the reductions in tax payments from claiming depreciation.
D. present value of the increase in tax payments from claiming depreciation.
E. amount of the increase in tax payments from claiming depreciation.
73. Depreciation and amortization affect both net income reported in the financial statements and taxable income on tax returns. Which of the following is true?
A. Taxing authorities in most jurisdictions specify allowable depreciation methods for tax reporting.
B. When permitted to do so by the taxing authority, firms often use different depreciation methods for financial and tax reporting.
C. The difference between depreciation expense in the financial statements and the depreciation deduction on the tax return leads to an issue in accounting for income taxes.
D. all of the above
E. none of the above
74. When taxing authorities permit a choice among alternative depreciation methods, a firm should choose the alternative that allows it to pay the _____ amount of tax, as _____ as possible, within the law.
A. most; early
B. most; late
C. least; early
D. least; late
E. same; often
75. U.S. GAAP authoritative guidance requires that financial statements report depreciation charges based on _____ estimates; in practice, the _____ method is the most common.
A. aggressive; straight-line (time)
B. reasonable; straight-line (time)
C. aggressive; straight-line (use)
D. reasonable; straight-line (use)
E. reasonable; accelerated
76. Recording periodic depreciation and amortization results in a
A. debit to an expense account, only
B. debit to a product cost account, only.
C. debit to either an expense account or a product cost account.
D. credit to either an expense account or a product cost account.
E. credit to an expense account, only.
77. Depreciation of factory buildings and equipment used in manufacturing operations becomes
A. part of the cost of work-in-process inventories
B. part of the cost of finished goods inventories
C. product costs
D. all of the above
E. none of the above
78. The amortization of a customer list are
A. product costs.
B. period costs.
C. not required under U.S. GAAP.
D. not required under IFRS.
E. pay back costs.
79. The recording of amortization of intangibles generally results in a
A. credit directly to the asset account that is being amortized.
B. debit directly to the asset account that is being amortized.
C. credit a contra-asset account called Accumulated Amortization.
D. debit a contra-asset account called Accumulated Amortization.
E. none of the above
80. The entry to record periodic depreciation of $4,500 on office facilities is as follows:
A. Depreciation (or Administrative) Expense . . . . . . . . . . . . . . . . 4,500
Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500
B. Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500
Depreciation (or Administrative) Expense . . . . . . . . . . . . . . . . . . . . . . 4,500
C. Depreciation (or Administrative) Expense . . . . . . . . . . . . . . . . 4,500
Office Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500
D. Office Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500
Depreciation (or Administrative) Expense . . . . . . . . . . . . . . . . . . . . . . 4,500
E. none of the above
