Practice Depreciation Accounting Methods - 5 | 5. Construction Methods and Equipment Management | Construction Engineering & Management - Vol 1
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5 - Depreciation Accounting Methods

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What are the two main components of equipment costs?

💡 Hint: Think about costs that are incurred whether the equipment is used or not.

Question 2

Easy

Define depreciation in your own words.

💡 Hint: Consider how equipment wears down or loses value.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is the primary distinction between ownership and operating costs?

  • Ownership costs occur regardless of usage
  • Operating costs are fixed
  • Ownership costs vary per project

💡 Hint: Think about costs that are always present.

Question 2

True or False: Depreciation is a cash expense.

  • True
  • False

💡 Hint: Consider whether this represents an actual payment.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A piece of equipment costs $200,000, has a salvage value of $20,000, and a useful life of 8 years. Calculate its annual depreciation using both the straight line and double declining balance methods.

💡 Hint: Calculate straight-line normally; remember double declining balance requires calculating based on book value.

Question 2

If a machine has a useful life of 10 years and an initial cost of $100,000 with a salvage value of $10,000, outline the first year's depreciation using the sum of years' digits method.

💡 Hint: Sum of the digits from 1 to 10 gives you the denominator.

Challenge and get performance evaluation