IFRS questions are available at the end of this chapter.
TRUe-FALSe—Conceptual
Answer No. Description
T 1. Nature of depreciation. F 2. Nature of depreciation. T 3. Depreciation, depletion, and amortization. T 4. Definition of depreciation base. F 5. Factors involved in depreciation process. F 6. Definition of inadequacy. T 7. Objection to straight-line method. F 8. Units-of-production approach. F 9. Accelerated depreciation method. T 10. Declining-balance method. T 11. Group or composite approach. F 12. Use of the composite approach. T 13. Accounting for changes in estimates. F 14. Computation of impairment loss amount. T 15. First step in determining an impairment. T 16. Reporting impaired assets held for disposal. F 17. Method used to compute depletion. T 18. Costs included in depletion base. F 19. Computing asset turnover ratio. T 20 Profit margin on sales ratio.
Multiple Choice—Conceptual
Answer No. Description
d 21. Knowledge of depreciation accounting. b 22. Conceptual rationale for depreciation accounting. c 23. Depreciation and retaining funds. b S24. Definition of depreciation. a S25. Service life vs. physical life. a P26. Definition of depreciable cost. d 27. Economic factors affecting useful service life. d 28. Factors involved in computing depreciation. d 29. Straight-line method assumption. a 30. Activity method of depreciation. a 31. Units-of-production method of depreciation. d 32. Units-of-production method of depreciation. d 33. Knowledge of double-declining balance method. c 34. Components of sum-of-the-years'-digits method. c 35. Graphic depiction of straight-line and sum-of-the-years'-digits methods. b 36. Disadvantage of using straight-line method.
Multiple Choice—Conceptual (cont.)
