Multiple choice

1. _________ is used to depreciate assets when the actual service rendered by the asset is a more appropriate base for depreciation than its years of service.

A. declining-balance 

B. sum-of-years’-digits 

C. units of production XXXXXX

D. MACRS 

2. _________ property is land and generally anything that is erected on, growing on, or attached to the land.

A. Useful 

B. Tangible 

C. Intangible 

D. Real 

3. An asset’s purchase cost plus freight and/or installation charges required to place the asset into service is called the:

A. market value 

B. salvage value 

C. total cost XXXXXX

D. cost base 

4. Under MACRS, the type of recovery property being depreciated determines which _________ will be used to determine the recovery amount.

A. method 

B. value 

C. class XXXXXX

D. cost base