Q1. An asset is impaired when: A) accumulated depreciation plus salvage value exceeds acquisition costs. B) the firm can no longer fully recover the carrying amount of the asset. C) the present value of future cash flows exceeds the carrying amount of the asset.
Q2. Lakeside Co. recently determined that one of its processing machines has become obsolete three years early and, unexpectedly, has no salvage value. Which of the following statements is most consistent with this discovery? A) Historically, economic depreciation was overstated. B) Lakeside Co. will owe back taxes. C) Historically, economic depreciation was understated.
Q3. As part of a major restructuring of business units, General Security (an industrial conglomerate operating solely in the U.S. and subject to U.S. GAAP) recognizes significant impairment losses. The Investor Relations group is preparing an informational packet for shareholders, employees, and the media. Which of the following statements is least accurate? A) The write-downs are reported as a component of income from continuing operations. B) During the year of the write-downs, retained earnings and deferred taxes will decrease. C) Write-downs taken on asset values can be reversed in later years if market conditions improve.
Q4. An impairment write-down is least likely to decrease a company's: A) assets. B) debt-to-equity ratio. C) future depreciation expense.
Q5. Taking an impairment of long-lived assets will result in: A) increased future ROA. B) increased deferred tax liabilities. C) decreased debt/equity ratio.
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发表于 2009-1-19 10:18
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