12. Assets are depreciated:

a. Because depreciation adds to the operating profit of a company.

b. Because assets are always worthless after their useful life.

c. To determine the salvage value of the asset.

d. To spread the costs to the periods benefiting from the asset.

13. The straight-line depreciation method:

a. Is simple to apply

b. Results in the smallest amount of total depreciation expense over the life of the asset

c. Is required by the PFRS

d. Results in the largest amount of total depreciation expense over the life of the asset

14. Which depreciation method generally results in the lowest net income for the first year a plant asset is utilized?

Group of answer choices

a. 150% declining-balance

b. Units-of-activity, uniform over life of asset

c. Double declining-balance

d. Straight-line

15. A depreciable asset has an estimated 15% salvage value. Under which of the following methods would the salvage value be deducted to original cost to get the depreciation for the month?

I. Straight-line

II. Double Declining Method

Group of answer choices

a. I. No; II. Yes

b. I. Yes; II. Yes

c. I. Yes; II. No

d. I. No; II. No

16. Which of the following is not a consideration in determining the useful life of an intangible asset?

a. Cost

b. Provisions for renewal or extension

c. Legal, regulatory, or contractual provisions

d. Expected actions of competitors

17. Intangible assets have all of the following characteristics, except:

a. their ownership confers rights, but no physical substance.

b. they are relatively long-lived.

c. they provide benefits to current operations only.

d. they have no physical substance.