Question 20 2 pts Once the estimated depreciation expense for an asset is calculated: o It cannot be changed, based on the historical cost principle. The estimate itself cannot be changed; however, new information should be disclosed in financial statement footnotes. Any changes are accumulated and recognized when the asset is sold. It may be revised based on new information. It cannot be changed, based on the consistency principle. Question 21 2 pts Revenue expenditures: Extend the asset's useful life. Are additional costs of plant assets that do not materially increase the asset's life or its productive capabilities. Substantially benefit future periods. Are debited to asset accounts when incurred. Are known as balance sheet expenditures because they relate to plant assets. Question 22 2 pts Extraordinary repairs: Are expensed when incurred. Extend the useful life of an asset beyond its original estimate. Are additional costs of plants assets that do not materially increase the asset's life Are revenue expenditures. Are credited to accumulated depreciation. Question 23 The modified accelerated cost recovery system (MACRS): Does not allow partial year depreciation. Is required for financial reporting. Is identical to units of production depreciation. Is included in the U.S. federal income tax rules for depreciating assets. Is an outdated system that is no longer used by companies Question 24 2 pts Amortization is: An accelerated form of expensing an asset's cost. The process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use. The systematic allocation of the cost of an intangible asset to expense over its estimated useful life The process of allocating the cost of natural resources to periods when they are consumed. Also called depletion Question 25 2 pts Natural resources are: Tangible assets used in the operations of the business. Not subject to allocation to expense over their useful lives. Depleted using a straight-line method. Consumable assets such standing timber, mineral deposits, and oil and gas felds. O Current assets because they are depleted, Question 26 2 pts A machine originally had an estimated useful life of 6 years, but after 4 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining: 10 years. 4 years. 2 years. 16 years. 06 years. D Question 27 2 pts Intangible assets do not include: Goodwill. Copyrights. Trademarks. Land held as an investment Patents. Question 28 2 pts A company used straight-line depreciation for an item of equipment that cost $12,000, had a salvage value of $2,000 and a five-year useful life. After depreciating the asset for three complete years, the salvage value was reduced to $1,200 but its total useful life remained the same. Determine the amount of depreciation to be charged against the equipment during each of the remaining years of its useful life: $2,400. $1,000. $1,800. $5,400. $2,000. Question 29 2 pts Depletion is: An increase in the value of a natural resource when incurred. Also called amortization. The process of allocating the cost of intangibles to periods when they are used. Calculated using the double-declining balance method. The process of allocating the cost of natural resources to the period when it is consumed.