14) A company can find the book value on one of its fixed assets by: a. Selling

Question

14) A company can find the book value on one of its fixed assets by: a. Selling Price -Depreciation Expense b. Book Value Accumulated Depreciation c. Selling Price - Accumulated Depreciation d. Selling Price Accumulated Depreciation 15) If a company uses the Double Declining balance method of depreciation, what will happen to its depreciation expense over time? a. b. c. d. Depreciation Expense will increase over time Depreciation Expense will be higher in the earlier years of the asset's life Depreciation Expense will be higher in the later years of the asset's life Depreciation Expense will stay the same each year

Explanation / Answer

Answer:-14)-A company can find the book value of one of its fixed assets by:-Book value – Accumulated depreciation (Option b).

Explanation:- Book value of an asset is the value at which the asset is carried on a balance sheet and calculated by taking the cost of an asset minus the accumulated depreciation.

15)-If the company uses the Double decline balance method of depreciation, depreciation Expense will be higher in the earlier years of the assets life (Option b).

Explanation:- Declining balance method of depreciation is a method of accelerated depreciation in which the amount of depreciation that is charged to an asset declines over time. In other words, more depreciation is charged during the beginning of the life time and less is charged during the end. The reason behind for more depreciation is charged in beginning years is that assets are usually more productive when they are new and their productivity declines gradually.

Straight line method of depreciation always provide a smallest amount of depreciation in the first year.

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