An Asset Is Not Required to Be Depreciated If

question 12

Multiple Choice

An asset is not required to be depreciated if:

• A)its residual value exceeds its carrying amount
• B)its fair value exceeds its carrying amount
• C)its carrying amount exceeds its residual value
• D)its book value exceeds its carrying amount

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Definitions:

Total Asset Turnover

An efficiency ratio indicating how well a company's assets are used to generate revenue from sales.

Average Total Assets

The average value of all the assets a company owns over a specific time period, calculated by adding the beginning and ending assets and dividing by two.

Net Sales

The amount of revenue generated by a company after deducting returns, allowances for damaged goods, and discounts.

Modified Accelerated Cost Recovery System (MACRS)

A tax depreciation system in the United States that allows for the accelerated write-off of property under various classifications.