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1. ABC Company uses a calendar year and purchases a fixed asset on March 5. Under the one-half year convention, when will ABC begin depreciating the asset?

a.July 1

b.January 1

c.January 1 of next year

d.March 1

2. Which of the following fixed assets are likely to use group depreciation?

a.Office equipment

b.Monitors

c.Machines

d.Factory equipment

3. When an asset in a group is retired, the entry to record the retirement would include

a.a disclosure in the financial statements.

b.a credit to the asset account and a debit to Accumulated Depreciation.

c.a credit to Accumulated Depreciation and a debit to the asset account.

d.recording the gain or loss on the asset retirement.

4. ABC Company purchased land for $2,500,000 from which it expects to extract 200,000 tons of coal. The estimated residual value is $500,000. What is the unit depletion rate for the coal?

a.$4.60 per ton

b.$12.50 per ton

c.$12.00 per ton

d. $10.00 per ton

5. A change in the estimates making up depreciation for a fixed asset will result in a recalculation of depreciation expense. This recalculation is accounted for

a.with a debit to Retained Earnings.

b.by a prior period adjustment.

c.with a credit to Retained Earnings.

d.prospectively.

6. On January 1, 2019, Jacob Corporation purchased equipment for $200,000. The equipment had an estimated useful life of 10 years and an estimated residual value of $40,000. Using the double-declining-balance method, how much depreciation expense should Jacob Corporation report on the company's balance sheet at December 31, 2020?

a.$32,000

b.$16,000

c.$40,000

d.$20,000

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