Moat companies benefit by using accelerated depreciation methods for income tax
ID: 2427643 • Letter: M
Question
Moat companies benefit by using accelerated depreciation methods for income tax purposes. 17 Goodwill is only recorded when the value of a company increases and not when it decreases IS Straight-line is. the most widely used depreciation method in financial statements, and MACRS is the required method used in federal income tax returns 10 The systematic write-off of intangible assets (patents, trademarks, etc) to expense is called depletion The balance sheet always reflects a company's current values U S. GAAP requires that a company should capitalize goodwill and adjust its value if subject to impairment A revenue expenditure is an operating expense A capital expenditure is charged to owners' equity. Intangible assets are amortized rather than depreciated Transportation, installation, sales tax are included in the cost of putting an asset in placeExplanation / Answer
13. depreciation is allocation of cost of asset to expense
so the statement is false.
14. this statement is true as in half year convention asset is being acquired exactly in the middle of the year.
15. True as when the revenue expenditure is recorded as capital expenditure it reduced the revenue expense in the current year so it will overstate the net income.
16. True Accelerated depreciation provides with the early depreciation expense.
17. False as goodwill is also recorded when the value of the company decreases.
18. True straight line method is most widely used method
19. False as systemetic write off intangibe asset is called amortization.
20. False balance sheet can be based on the book value.
21. True US gaap requires that company should captilize goodwill.
22. True revenue expenditure is operating expense.
23. False capital expenditure is not charged to owners equity it is shown as assets
24. True intangible assets are amortized.
25. True these costs are included in the cost of putting an asset in place.