FREE Robert Half Accounting Questions and Answers
On the balance sheet, trademarks are often listed.
Explanation:
Trademarks are generally shown on the balance sheet under intangible assets. Intangible assets lack physical substance and are not financial instruments but have value to the company because of their long-term economic benefits. Examples of intangible assets include trademarks, patents, copyrights, goodwill, and customer lists.
Residual value is used to calculate depreciation.
Explanation:
Residual value, also known as salvage value or scrap value, is the estimated value of a plant asset at the end of its useful life. It is an essential factor in calculating depreciation, affecting each period's depreciation expense.
The price of research and development.
Explanation:
Research and development costs are generally expensed when incurred under Generally Accepted Accounting Principles (GAAP). This means that these costs are recognized as expenses on the income statement in the period in which they are incurred.
A long-term asset's cost is expensed.
Explanation:
The cost of a long-term asset is not expensed immediately when the asset is acquired. Instead, it is capitalized and recognized as an asset on the company's balance sheet. The cost is then gradually expensed over the asset's useful life through depreciation.
The process of depreciation.
Explanation:
Depreciation is a process of allocating the cost of a long-term asset over its useful life. The cost of a long-term investment is not expensed immediately when the asset is acquired. Instead, it is capitalized and recognized as an asset on the company's balance sheet. The cost is then gradually expensed over the asset's useful life through depreciation.
Allocating a plant asset's cost throughout its useful life is called depreciation (n).
Explanation:
Depreciation is the process of allocating the cost of a plant asset over its useful life systematically and rationally. This reflects the wear and tear, obsolescence, or decrease in asset value over time.
A piece of equipment that costs $225,000 is expected to last four years and have a residual value of $15,000. It will be depreciated using a straight line. How much will depreciation cost for the first full year?
Explanation:
To calculate the annual depreciation using the straight-line method, we can use the formula:
Annual depreciation = (Asset Cost - Residual Value) / Useful Life
In this case, the asset cost is $225,000, the residual value is $15,000, and the useful life is four years. So, we can calculate the annual depreciation as follows:
Annual depreciation = ($225,000 - $15,000) / 4
Annual Depreciation = $210,000 / 4
Annual Depreciation = $52,500
Therefore, the annual depreciation cost for the first full year would be $52,500.