Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ________________ which ever is smaller ?
(A) Fixed percentage of gross income or the net taxable income
(B) Fixed percentage of gross income or 50% of the net taxable income
(C) 50% of the fixed percentage of gross income or 50% of the net taxable income
(D) 50% of the fixed percentage of gross income or the net taxable income
What are the common methods of computing depletion charge ?
(A) Rational method and irrational method
(B) Conservative method and conventional method
(C) Unit method and percentage method
(D) Discrete method and depletion allowance method
What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries, etc. due to the gradual extraction of its contents ?
(A) Depletion
(B) Inflation
(C) Depreciation
(D) Deflation
The functional depreciation is sometimes called ____________________?
(A) Demand depreciation
(B) Adolescence
(C) Life depreciation
(D) Failure depreciation
What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results ?
(A) Functional depreciation
(B) Design depreciation
(C) Physical depreciation
(D) Demand depreciation
What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render ?
(A) Functional depreciation
(B) Design depreciation
(C) Physical depreciation
(D) Demand depreciation
What refers to the present worth of cost associated with an asset for an infinite period of time ?
(A) Annual cost
(B) Increment cost
(C) Capitalized cost
(D) Operating cost
The unrecovered depreciation which results due to poor estimates as to the life of the equipment is called _____________________?
(A) Sunk cost
(B) Economic life
(C) In-place value
(D) Annuity
The process of determining the value or worth of a physical property for specific reason is called ____________________?
(A) Investment
(B) Valuation
(C) Economy
(D) Depletion
In computing depreciation of an equipment, which of the following represents the first cost ?
(A) The original purchase price and freight charges
(B) Installation expenses
(C) Initial taxes and permit fees
(D) All of the above