Practice Characteristics of Depreciation - 18.3 | 18. Depreciation Accounting | Management 1 (Organizational Behaviour/Finance & Accounting)
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18.3 - Characteristics of Depreciation

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is depreciation?

💡 Hint: Think about how businesses track asset values over time.

Question 2

Easy

Is depreciation a cash expense?

💡 Hint: Consider how financial statements categorize expenses.

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

Which of the following statements is true about depreciation?

  • A. It applies to intangible assets.
  • B. It is a cash expense.
  • C. It reduces the book value of an asset.

💡 Hint: Think about what happens to assets as they age.

Question 2

True or False: Depreciation is necessary for maintaining accurate financial statements.

  • True
  • False

💡 Hint: Consider why businesses report their profits.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A factory buys a new machine for $100,000, which is expected to have a useful life of 10 years and a residual value of $10,000. Calculate the annual depreciation and discuss its implications for financial planning.

💡 Hint: Use the depreciation formula discussed earlier.

Question 2

If a company decided to sell an asset worth $50,000 after 5 years with an annual depreciation of $5,000, what would be the book value at the time of sale? Also, discuss how such decisions impact investor perception.

💡 Hint: Calculate as before and consider the bigger picture of company strategy.

Challenge and get performance evaluation