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Which of the following is untrue regarding asset retirement obligations?
Companies do not need to discount cash flows when estimated asset retirement obligations.
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Which of the following would be included in the journal entry to retire a fixed asset?
When an asset is retired, the asset value and its related accumulated depreciation are reverse. This means a debit will be booked to accumulated depreciation to clear the account.
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Which of the following is not a common method of asset disposal?
The most common methods of asset disposal are sale, scrap, and exchange.
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Of the following assets, which is an intangible that is subject to a recoverability test when testing for impairment?
The recoverability test is only performed on intangible assets with a limited life. A patent generally has a limited life.
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Goodwill should be tested for value impairment at which of the following levels under US GAAP?
US GAAP requires that goodwill be tested for impairment at the reporting unit level.
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Which situation would likely dictate use of units of production depreciation?
Land is not depreciated, and a machine which produces products would incur damage, wear and tear, and usage only as it produces goods. Buildings and trucks would be depreciated throughout their lives.
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