How Does Management Estimate Useful Lives And Residual Values

Question: Which account is credited in a journal entry to record depreciation on machinery?

Answer: Accumulated Depreciation

Question: All costs to get an asset in place and ready for its intended use should be ______.

Answer: Capitalized.

Question: Declining-balance depreciation methods are also called _____ depreciation methods.

Answer: Accelerated

Question:

Answer: 1. False

2. False

3. True - Correct

4. False

Question: In accordance with the expense principle, the term ____ describes the process of expensing natural resource’s cost in the period related revenues are earned.

Answer: depletion

Question: Another term for residual value is ____ value.

Answer: salvage

Question: How does management estimate useful lives and residual values?

Answer: They use professional judgment.

Question: Depreciation expense is an estimate because it is based on the asset’s estimated ___ and ____ value.

Answer: useful life and residual value

Question:

Answer: 1. The asset, Timberland, is decreased.

2. The asset, Inventory, is increased.

Question: Which of these are parts of the journal entry to record depreciation?

1. Debit Depreciation Expense

2. 2. Debit Accumulated Depreciation

3. 3. credit Depreciation Expense

4. 4. Credit Accumulated Depreciation

5. Answer: 1. Debit Depreciation Expense

6. 4. Credit Accumulated Depreciation