1/Which of the following is true? a.If using the double-declining-balance the to

Question

1/Which of the following is true?
a.If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest.
b.If using the units-of-production method, it is possible to depreciate more than the depreciable cost.
c.If using the straight line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance.
d.Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.

2/ You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company’s bank account balance. Complete the following table to help your new staff understand.

ITEM / Debit Credit ? / Increases or Decreases the Company’s Bank Account Balance?


EFT payment ------- dr or Cr ? Increases or Decreases ?

Bank correction of an error due to posting another customer’s check to your account
Service Charge ? dr or Cr ? Increases or Decreases ?

Note collected for our company ...... dr or Cr ? Increases or Decreases ?

NSF check ........dr or Cr ? Increases or Decreases ?

Bank correction of an error recording a $520 deposit as $250 ......dr or Cr ? Increases or Decreases ?

EFT deposit.........dr or Cr ? Increases or Decreases ?

Explanation / Answer

2. With a bank statement, Debits are like a withdrawal from your account. Credits are like a "deposit" into the account, when money is put into the account. When you withdrawal money from the account, the bank account balance is going to decrease. When you deposit money into the account, the bank account is going to increase. Therefore, a payment would be considered a debit because you are paying someone and therefore it is a withdrawal from your account. When any type of deposit is made to your account it is considered a credit because money is being put into your account.

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