Financial Accounting (ACCT 102) Depreciation, Amortization, and Fixed Assets Practice Problems
Indiana University Bloomington
Financial Accounting (ACCT 102) | Practice Problems

Overview
A financial accounting practice packet on long-lived assets, depreciation methods, amortization, impairment basics, and statement effects.

Key topics
•capitalizing vs expensing asset costs
•straight-line depreciation
•double-declining balance basics
•amortization of intangible assets
•gain loss and statement effects on disposal

Suggested study tasks
•classify 8 costs as capitalized or expensed
•calculate depreciation under straight-line and double-declining methods
•record 4 adjusting entries for depreciation or amortization
•compute book value and gain or loss on disposal
•explain how each transaction affects the financial statements

Common pitfalls
•using salvage value incorrectly in accelerated methods
•forgetting accumulated depreciation is a contra-asset
•recording cash paid as depreciation expense
•mixing amortization with depletion
•changing one statement without updating related effects