True / False Questions
1. Plant assets are assets that are held for sale.
2. Plant assets are used in everyday operations of the business and have useful lives that extend over more than one accounting period.
3. Depreciation is the process of allocating the cost of a plant asset to an expense account in the accounting periods benefiting from its use.
4. Salvage value is an estimate of an asset's value at the end of its benefit period.
5. Depreciation measures the actual decline in market value of an asset.
6. A plant asset's useful life might not be the same as its productive life.
7. Accumulated depreciation represents funds set aside to buy new assets when the assets currently owned are replaced.
8. When an asset is purchased (or disposed of) at any time other than the beginning or the end of an accounting period, depreciation is recorded for part of a year so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation.
9. Revising an estimate of the useful life or salvage value of a plant asset is referred to as a change in accounting estimate and is reflected in the past, current, and future financial statements.
10. The going-concern principle supports the reporting of plant assets at book value rather than market value.