Question

QUESTION 4 The depreciation method that does not use residual value in calculating the first year's depreciation expense is straight-line O units-of-production O double declining-balance none of the above QUESTION 5 5 po The receivable that is usually evidences by a formal instrument of credit is an) O trade receivable. o note receivable. accounts receivable. income tax receivable.

Answer 1

Question 4

Answer is Option C) Double Declining method

For straight line method and units of production method - residual value is deducted from the cost of asset and then depreciation is calculated over life of the assets /Total units of production

But in case of Double Declining method the depreciation rate is applied on the Book value of asset each year. At the end of the life of asset book value is equal to salvage value.

Hence answer is Double Declining method.

Question 5

Answer is Option B) Note receivable

Note receivable is a formal instrument of credit obtained from the other party. It contains the total money due by the party to the receiver. Note receivable is Current Assets if due date is less than 1 year .

Trade receivable and Accounts receivable are generated for sales to customers. Income tax receivable is refund receivable from the income tax department

Hence answer is Note Receivable