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CA Foundation Depreciation and Amortisation — practice questions — page 3

Explore 82 free Depreciation and Amortisation questions in CA Foundation Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Depreciation and Amortisation questions and exercises with answers

Showing questions 61–82 of 82.

Which event may signal that an asset has become impaired?Read the answer and worked solution →In the recoverability test, an asset is impaired if expected cash flows are?Read the answer and worked solution →Salvage value of an asset is also known as its?Read the answer and worked solution →Residual value is the disposal estimate after deducting what?Read the answer and worked solution →The cost of a fixed asset for depreciation purposes includes which item?Read the answer and worked solution →Under IAS 16, property, plant and equipment is expected to be used during?Read the answer and worked solution →Net book value of an asset equals its historical cost less?Read the answer and worked solution →The double-declining-balance method never brings book value below?Read the answer and worked solution →Some declining balance users each year apply the greater of the declining charge and what?Read the answer and worked solution →The diminishing balance method gives a higher charge in which years?Read the answer and worked solution →Sum-of-years-digits assumes that assets are most productive when?Read the answer and worked solution →Compared with straight-line, sum-of-years-digits write-off is?Read the answer and worked solution →Straight-line depreciation charges what pattern over the asset's life?Read the answer and worked solution →Which cost forms part of the depreciable basis of an asset?Read the answer and worked solution →A tax system that allows a fixed percentage of cost each year is called?Read the answer and worked solution →For tax depreciation, bare land generally receives?Read the answer and worked solution →Buildings are generally given what depreciable lives under tax systems?Read the answer and worked solution →Pooling of similar assets bought in one year helps tax systems to?Read the answer and worked solution →Cost depletion allocates the cost of a resource in proportion to what?Read the answer and worked solution →Depletion is the using up of natural resources by which activity?Read the answer and worked solution →Depletion is most used in which group of industries?Read the answer and worked solution →How does depreciation expense affect the reported net income?Read the answer and worked solution →

Worked practice questions

Which event may signal that an asset has become impaired?

  1. A new letterhead design
  2. A routine yearly repainting
  3. A rise in owner's capital
  4. A change in how it is used
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Correct answer: D. A change in how it is used

A change in how the asset is used is listed among the events that can lead to impairment.

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In the recoverability test, an asset is impaired if expected cash flows are?

  1. More than carrying amount
  2. Equal to carrying amount
  3. Less than carrying amount
  4. Exactly zero always
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Correct answer: C. Less than carrying amount

If the sum of expected cash flows is below the carrying amount, the asset is considered impaired.

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Salvage value of an asset is also known as its?

  1. Residual value
  2. Face value
  3. Market capital
  4. Goodwill
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Correct answer: A. Residual value

Salvage value and residual value are two names for the amount expected at the end of the asset's life.

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