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The activity method of depreciation

Question 5 options:

	a) is a variable charge approach.
	b) assumes that depreciation is a function of the passage of time.
	c) conceptually associates cost in terms of input measures.
	d) all of these.

Question 6 (1 point)

When accounting for asset exchanges, if a transaction lacks commercial substance, which of the following is correct?

Question 6 options:

	Gains can be recognized
	Gains cannot be recognized
	The gain will always be $10,000
	The cost of the asset received is equal to the net book value plus the gain plus the accumulated depreciation

Question 7 (1 point)

Albany Inc. incurred the following costs during the year ended December 31, 2014:

Laboratory research aimed at discovery of new knowledge........................ $240,000

Design of new products involving new technology.............................. 87,000

Testing of new products..................................................................... 58,000

Construction of research and development facilities........................... 360,000

Assuming the 6 specific conditions have been demonstrated for development costs, the total amount that is eligible to be capitalized for 2014 is

Question 7 options:

	a) $145,000.
	b) $240,000.
	c) $327,000.
	d) $600,000.

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