🡸 Chapter 8      Navigate…      Chapter 9B 🡺

Chapter 9A (Pt. 1) – Reporting and Analyzing Long-Lived Assets

Here’s most of Part 1 of Chapter 9. If your profs like mine, we’ll finish part 1 along with part 2 in the next post. Be sure to check below the notes for additional potential multiple choice questions to check your knowledge.

This chapter discusses:

  • Property, Plant, and Equipment
  • Operating Expenditures
  • Capital Expenditures
  • Categories of Property, Plant, and Equipment
  • Calculating the Cost of Land, Buildings, and Equipment
  • To Buy or Lease?
  • Advantages of Leasing
  • Operating vs. Finance Lease
  • Cost Model
  • Depreciation and Calculating Depreciation
  • Methods of Depreciation

9-19-29-39-49-59an


Test Your Knowledge:

1. Which of the three depreciation methods would best reflect the actual revenue an asset gives?

a) Straight-Line

b) Diminishing Balance

c) Unit of Production

2. Of the three depreciation methods, which one will generally post the highest depreciation expense in the first year?

a) Straight-Line

b) Diminishing Balance

c) Unit of Production

3. Of the three depreciation methods, which one would generally post the smallest depreciation expense in the final year?

a) Straight-Line

b) Diminishing Balance

c) Unit of Production

The key words in questions 2 and 3 is “generally”. It is possible that using the Unit of Production method, an asset which is heavily used in its first year shows the highest depreciation expense.

🡸 Chapter 8      Navigate…      Chapter 9B 🡺

Find more Accounting Notes here.

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