The unrecovered depreciation which results due to poor estimates as to the life of the equipment is called _____________________?

Related Mcqs:

1. ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no salvage value. Determine the length of service life necessary if the depreciation used is the SYD method ?

   A. 7 eyars
   B. 8 years
   C. 9 years
   D. 10 years

2. What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render ?

   A. Functional depreciation
   B. Design depreciation
   C. Physical depreciation
   D. Demand depreciation

3. What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results ?

   A. Functional depreciation
   B. Design depreciation
   C. Physical depreciation
   D. Demand depreciation

4. In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year ?

   A. Straight line method
   B. Sinking fund method
   C. Sum-of-year digit method
   D. Declining balance method

5. What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset ?

   A. Asset recovery
   B. Depreciation recovery
   C. Period recovery
   D. After-tax recovery

6. In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset ?

   A. Straight line method
   B. Sinking fund method
   C. Sum-of-year digit method
   D. Declining balance method

7. In computing depreciation of an equipment, which of the following represents the first cost ?

   A. The original purchase price and freight charges
   B. Installation expenses
   C. Initial taxes and permit fees
   D. All of the above

8. An asset is purchased for P 9,000.00. Its estimated economic life is 10 years after which it will be sold for P 1,000.00. Find the depreciation in the first three years using sum-of-years digit method____________________?

   A. P 3,279.27
   B. P 3,927.27
   C. P 3,729.27
   D. P 3,792.72

9. The functional depreciation is sometimes called ____________________?

   A. Demand depreciation
   B. Adolescence
   C. Life depreciation
   D. Failure depreciation

10. The flow back of profit plus depreciation form a given project is called ___________________?

    A. Capital recovery
    B. Cash flow
    C. Economic return
    D. Earning value