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Test your understanding with targeted questions related to the topic.
Question 1
Easy
What is depreciation?
💡 Hint: Think about the wear and tear on a machine.
Question 2
Easy
List the components needed to calculate straight line depreciation.
💡 Hint: Consider what information you'd need about the equipment.
Practice 4 more questions and get performance evaluation
Engage in quick quizzes to reinforce what you've learned and check your comprehension.
Question 1
What is the formula for calculating annual depreciation using the Straight Line Method?
💡 Hint: Remember DICer!
Question 2
The Straight Line Method assumes depreciation occurs at what rate?
💡 Hint: Consider what happens each year in value.
Solve 1 more question and get performance evaluation
Push your limits with challenges.
Question 1
A company buys a crane for $200,000. The crane’s salvage value is $30,000, and it has a useful life of 15 years. Also, tire costs are $10,000. Calculate the annual depreciation. How might this impact their financial reports over the years?
💡 Hint: Substitute everything correctly into the formula.
Question 2
Consider a construction company that uses a backhoe for 10 years, initially costing $50,000, with a salvage value of $5,000 and a tire cost of $5,000. If they switch to an accelerated depreciation method, how would that affect their immediate tax obligations compared to the Straight Line Method?
💡 Hint: Consider how each method tracks loss and how that impacts financial statements.
Challenge and get performance evaluation