UNDERSTANDING FINANCIAL
ACCOUNTING EXAM TEST
QUESTIONS WITH ANSWERS
GRADED A PLUS
◉ A plant asset was purchased on January 1 for $40,000 with an
estimated salvage value of $8,000 at the end of its useful life. The
current year's Depreciation Expense is $4,000 calculated on the straight-
line basis and the balance of the Accumulated Depreciation account at
the end of the year is $20,000. The remaining useful life of the plant
asset is. Answer: 3 years
◉ On January 1, a machine with a useful life of five years and a residual
value of $25,000 was purchased for $75,000. What is the depreciation
expense for year 2 under the double-declining-balance method of
depreciation?. Answer: $18,000
◉ On May 1, 2013, Pinkley Company sells office furniture for $150,000
cash. The office furniture originally cost $375,000 when purchased on
January 1, 2006. Depreciation is recorded by the straight-line method
over 10 years with a salvage value of $37,500. What depreciation
expense should be recorded on this asset in 2013?. Answer: $11,250
ACCOUNTING EXAM TEST
QUESTIONS WITH ANSWERS
GRADED A PLUS
◉ A plant asset was purchased on January 1 for $40,000 with an
estimated salvage value of $8,000 at the end of its useful life. The
current year's Depreciation Expense is $4,000 calculated on the straight-
line basis and the balance of the Accumulated Depreciation account at
the end of the year is $20,000. The remaining useful life of the plant
asset is. Answer: 3 years
◉ On January 1, a machine with a useful life of five years and a residual
value of $25,000 was purchased for $75,000. What is the depreciation
expense for year 2 under the double-declining-balance method of
depreciation?. Answer: $18,000
◉ On May 1, 2013, Pinkley Company sells office furniture for $150,000
cash. The office furniture originally cost $375,000 when purchased on
January 1, 2006. Depreciation is recorded by the straight-line method
over 10 years with a salvage value of $37,500. What depreciation
expense should be recorded on this asset in 2013?. Answer: $11,250
