1. Depreciation is The process of allocating the cost of an asset over its useful life a. b. The process of allocating the cost of an asset over its salvage life An expense for an asset that will be used up in one year c. d. Not an expense 2. Which of the following assets does not decline in service potential over the course of its useful life and therefore, never depreciated? a. Equipment b. Furnishings c. Land d. Fixtures 3. The book value of an asset is equal to the a. Asset's fair value less its historical cost b. Blue book value relied on by secondary markets Replacement cost of the asset d. c. Asset's cost less accumulated depreciation 4. Which of the following is not considered an intangible asset? a. Goodwill b. Land c. A franchise d. A patent 5. Which of the following is not needed to calculate depreciation a. b. c. d. Salvage value of asset Cost of asset Amount of loan taken to purchase the asset Useful life of asset