Asset Management Asset Valuation and Accounting 2

Question 1

What is 'net book value' of an asset?

Accepted Answer

Original cost minus accumulated depreciation

Answer

Original cost plus interest

Answer

Market value at year end

Answer

Replacement cost minus salvage value

Question 2

Which method of depreciation results in higher expense in the early years of an asset's life?

Accepted Answer

Double declining balance

Answer

Straight-line

Answer

Units of production

Answer

Modified straight-line

Question 3

When an asset is sold for more than its net book value, the difference is recorded as:

Accepted Answer

Gain on disposal

Answer

Depreciation expense

Answer

Capital expenditure

Answer

Deferred revenue

Question 4

Which type of expenditure extends an asset's useful life and is capitalized rather than expensed?

Accepted Answer

Capital improvement

Answer

Routine maintenance

Answer

Emergency repair

Answer

Operating lease payment

Question 5

What is the primary purpose of an asset register in financial asset management?

Accepted Answer

Record all fixed assets with cost, depreciation, and location

Answer

Track employee assignments

Answer

Monitor supplier contracts

Answer

Log maintenance work orders

Question 6

Under GAAP, which cost is NOT capitalized as part of an asset's initial value?

Accepted Answer

Annual insurance premium

Answer

Purchase price

Answer

Freight and shipping costs

Answer

Installation costs