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Classification of Assets and Liabilities

Depreciable a...

Question

Depreciable assets are assets which ________________.

A

Are expected to be used for more than one accounting period

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B

Do not have a limited useful life

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C

Are held by the organization for sale in regular course of business

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D

All of the above

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Solution

The correct option is A Are expected to be used for more than one accounting period
A depreciable asset is property that provides an economic benefit for more than one reporting period. A capitalization limit may also be applied to keep lower-cost purchases from being classified as depreciable assets.
They are not held for sale in regular course of business.

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Q. Which of the following is correct? Depreciable assets are those assets which:
(1) Are expected to be used for more than one accounting period.
(2) Have a limited useful life
(3) Are held for the purpose of re-sale
(4) None of these

Q. _______ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time of obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined.

Q. __________ has defined depreciation as "a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, effluxion of time or obsolescence through technology and market changes. Depreciation is allocated so as to charge a fair proportion of depreciable amount in each accounting period during the expected useful life of the asset. Depreciation includes amortization of assets whose useful life is predetermined."

Q. According to which of the following concepts, fixed assets are depreciated over their useful life rather than over a shorter period on the expectation of early liquidation?

Q. Depreciation Accounting has been defined by the ________ as " a system of accounting which aims to distribute the cost or other basic value of tangible capital assets less salvage (if any) over the estimated useful life of the unit (which may be a group of assets) in a systematic and rational manner. It is a process of allocation and not of valuation".

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