DeVry ACCT 305 Week 3 QUIZ

 1.

Question :

(TCO 4) In the first year of an asset's life, which of the following methods has the largest depreciation?

Student Answer:

[removed] Straight-line.

[removed] Double-Declining balance.

[removed] Sum-of-the-years' digits.

[removed] Composite or group.

 2.

Question :

(TCO 4) Amortization refers to the cost allocation for:

Student Answer:

[removed] A patent.

[removed] A building.

[removed] Land.

[removed] A silver mine.

 3.

Question :

(TCO 4) The depreciable base for an asset is:

Student Answer:

[removed] Its service life.

[removed] The excess of its cost over residual value.

[removed] The difference between its replacement value and cost.

[removed] The amount allowable under MACRS.

 4.

Question :

(TCO 4) Cutter Enterprises purchased equipment for $72,000 on January 1, 2011. The equipment is expected to have a five-year life and a residual value of $6,000.  
Using the straight-line method, depreciation for 2011 would be:

Student Answer:

[removed] $13,200.

[removed] $14,400.

[removed] $72,000.

[removed] None of the above is correct. 
 
 

 5.

Question :

(TCO 4) A change in the estimated useful life and residual value of machinery in the current year is handled as:

Student Answer:

[removed] A retrospective change back to the date of acquisition as though the current estimated life and residual value had been used all along.

[removed] A prospective change from the current year through the remainder of its useful life, using the new estimates.

[removed] A cumulative adjustment to income in the current year for the difference in depreciation under the new vs. old estimates.

[removed] None of the above is correct.