Which type of asset is generally not depreciated because it normally has an unlimited useful life?
Correct answer: C. Freehold land
- A. Leasehold building
- B. Office equipment
- C. Freehold land
- D. Delivery vehicle
Explanation
Freehold land generally has an unlimited useful life and is therefore not depreciated. Buildings and equipment have finite useful lives and are depreciated over those lives.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Depreciation and Non-Current Assets
Non-current assets are long-term resources recorded at cost and reduced by accumulated depreciation to show their carrying amount. Coverage includes straight-line and reducing-balance methods, residual value, useful life, depreciation adjustments, capital and revenue expenditure, and the profit or loss arising when an asset is disposed of.
Practise Depreciation and Non-Current Assets
33 free Depreciation and Non-Current Assets MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Depreciation and Non-Current Assets questions
If the estimated residual value of a depreciable asset increases, while all other estimates remain unchanged, what normally happens to future depreciation expense?
A machine with a carrying amount of Rs. 100,000 is depreciated using the reducing-balance method at 20% per year. What is its depreciation for the second year?
An asset has a cost of Rs. 800,000 and accumulated depreciation of Rs. 240,000. What is its carrying amount before any impairment?
An asset cost Rs. 300,000 and has accumulated depreciation of Rs. 180,000 when it is sold for Rs. 140,000. What gain or loss arises on disposal?
Which expenditure on an existing machine is normally treated as revenue expenditure rather than capital expenditure?
A change in the estimated useful life of a non-current asset is normally accounted for as what type of change?