Question
1. Only assets used in normal business operations are classified as property, plant, and equipment. 2. If the expenditures for sidewalks, pavements, parking lots and
1. Only assets used in normal business operations are classified as property, plant, and equipment.
2. If the expenditures for sidewalks, pavements, parking lots and driveways are part of the blueprint for the construction of new building, these are charged to the cost of Land.
3. Accelerated depreciation (Declining balance) methods will decrease the amount of depreciation expense in the early years of the asset's life.
4. Directly attributable cost includes initial operating losses incurred prior to an asset achieving planned performance.
5. Straight-line depreciation methods will have higher book values for the assets on the balance sheet than companies that use accelerated depreciation.
6. As to land, capitalizable incidental costs do not include expenditures for fence, water system, sidewalk and paving.
7. The capitalizable costs of patents are legal fees and other registration costs.
8. Intangible assets are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes.
9. Acquisition cost capitalized as wasting asset can be the price paid for an already- discovered resource.
10. The total cost of the natural resource less salvage value is divided by the number of units estimated to be in the resource deposit, to obtain a depletion rate per unit.
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