midterm exam Flashcards
It is the systematic allocation of the depreciable amount of an asset over its useful life.
Depreciation
It is the total price of acquiring the natural resources or property right to search for undiscovered ressources.
Acquisition Cost
These are also known as wasting asset..
Natural resources
Which of the following inventories carried by manufacturer is similar to the merchandise inventory of a retailer?
Finished goods
This type of decreasing-charge method is based on a decreasing fraction of depreciable cost.
Sum of the years’ digit method
How should unallocated fixed overhead be treated?
Recognized as an expense in the period incurred
Which of the following should be included in inventory at the end of the reporting period?
Goods in transit purchased free on board (FOB) shipping point
Which of the following costs should be expensed immediately?
All of these
It is the cost incurred on extracting the resources such as drilling costs, tunnels, shaft, and wells.
Development cost
Which model for subsequent measurement is described in the statement below? “After recognition as an asset, an item of PPE shall be carried at its cost less any accumulated depreciation and any accumulated impairment loss”
Cost Model
It is the replacement of asset into a more efficient and economical one.
Supersession
On which of the following assumptions is straight-line depreciation based?
Service value declines as a function of time rather than use
It is a depreciation technique where a constant percentage is applied to the book value of an asset?
Declining-balance method
It is an asset that takes a substantial period of time to get ready for its intended use.
Qualifying asset
It is the estimated amount that an entity would obtain from disposal of the asset, after deducting the estimated costs of disposal if the asset is already of the age and in the condition expected at the end of its useful life.
Residual value
