Practice Factors Affecting Depreciation - 18.4 | 18. Depreciation Accounting | Management 1 (Organizational Behaviour/Finance & Accounting)
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18.4 - Factors Affecting Depreciation

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What factors do you consider when calculating the cost of an asset?

💡 Hint: Think about all expenses incurred to make the asset operational.

Question 2

Easy

What does residual value mean?

💡 Hint: Consider how much the asset might be sold for after use.

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 included in the cost of an asset?

  • Only the purchase price
  • Purchase price plus installation and delivery
  • Only installation costs

💡 Hint: Think about the entire investment made into the asset.

Question 2

True or False: Residual value is the estimated worth of an asset at the end of its useful life.

  • True
  • False

💡 Hint: Consider what happens to assets after they've been utilized.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company purchases a machine for $50,000. It incurs an installation cost of $5,000 and a delivery fee of $2,000. The estimated residual value is $8,000 at the end of 10 years. Using the straight-line method, calculate the annual depreciation expense.

💡 Hint: Remember to add all costs to find the total for depreciation.

Question 2

If a company re-evaluates its asset's useful life from 10 years to 5 years, but the cost and residual value remain the same, explain how this may impact their financial statements.

💡 Hint: Think about how financial reporting might change with a shorter useful life.

Challenge and get performance evaluation