Depreciation Is

question 63

Multiple Choice

Depreciation is:

• A) An exact calculation of the decline in value of an asset.
• B) Only an estimate of the decline in value of an asset.
• C) Only recorded at the end of a year and never over a shorter time period.
• D) Management must know the exact life of an asset in order to calculate an acceptable depreciation expense.

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Definitions:

Asset Recognition

The criteria and process for including items as assets in the financial statements.

Line-by-Line Method

A method of accounting where the revenues and expenses of subsidiaries are added line-by-line to those of the parent company for consolidated financial reporting.

Jointly Controlled Operations

Business activities that are controlled and managed by two or more parties under a joint agreement, sharing both the benefits and obligations.

Jointly Controlled Assets

Assets that are controlled and managed under a contractual arrangement by two or more parties, each having shared control over the economic benefits.