Question

Place T (true) or F (false) in front of each of the following statements.

____ 1. Plant assets should be written down (below cost) when their market value has declined temporarily.

____ 2. An asset's cost less its accumulated depreciation equals its fair value.

____ 3. The units of activity method of depreciation is based on the assumption that depreciation expense can be regarded as a constant function of time.

____ 4. The correction of prior periods' depreciation estimates would be disclosed on the retained earnings statement.

____ 5 Expenditures to improve the efficiency or extend the useful life of an asset should be capitalized.

____ 6 In non monetary exchanges losses are recognized only when the exchange has commercial substance.

____ 7 In non monetary exchanges gains are always recognized.

___ 8 Inventory should be reported at the lower of cost or market or net realizable value and it must be based on the values of total inventory

Answer 1

Hi

All are individual questions, although 4 have been answered, Kindly co-opreate: Solution: Answer: Explanation: It should be written down when permanently declined. 1) FALSE 2) FALSE It is equal to "Net Asset Book value". 3) FALSE It is based on the assumption that depreciation expense can be regarded as a variable function. 4) TRUE It is standardized.