108. Indicate whether each of the following statements regarding accounting for long-term assets is true or false.
_____ a) Other things being equal, the lower a company estimates the salvage value of a plant asset to be, the lower the company's net income will be.
_____ b) Depreciation expense is an example of a "non-cash" expense.
_____ c) A company cannot use the double declining method of depreciation for financial statements while using the straight-line method of depreciation for tax returns.
_____ d) The book value of an asset is the amount a company believes it is worth (its fair market-value) as of the date of the balance sheet.
_____ e) MACRS is not an acceptable way of computing depreciation expense under GAAP.
109. Indicate whether each of the following statements is true or false.
_____ a) Straight-line depreciation is the most widely used method in the U.S.
_____ b) An accelerated depreciation method provides a lower depreciation charge in the early years of an asset's life cycle than does the straight-line method.
_____ c) The units-of-production depreciation method allocates the cost of a plant asset in proportion to the asset's usage.
_____ d) Total depreciation expense recognized over the asset's life is not affected by the choice of depreciation methods.
_____ e) The entry to record depreciation affects the income statement and the statement of cash flows but not the balance sheet or statement of changes in stockholders' equity.