Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

8. Long Lived Assets

Depreciation: Summary of Main Methods

Financial Accounting

8. Long Lived Assets

Depreciation: Summary of Main Methods

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Multiple Choice

Which of the following depreciation conventions is NOT used under the Modified Accelerated Cost Recovery System (MACRS)?

Full-month convention

Mid-quarter convention

Mid-month convention

Half-year convention

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Verified step by step guidance

Understand the Modified Accelerated Cost Recovery System (MACRS): MACRS is a method of depreciation used in the United States for tax purposes. It allows businesses to recover the cost of certain assets over a specified life span using accelerated depreciation methods.

Review the depreciation conventions under MACRS: MACRS uses specific conventions to determine when depreciation begins and ends during the year. These conventions include the half-year convention, mid-quarter convention, and mid-month convention.

Clarify the half-year convention: This assumes that all assets placed in service or disposed of during the year are treated as if they were placed in service or disposed of at the midpoint of the year.

Clarify the mid-quarter convention: This applies if more than 40% of the total depreciable property is placed in service during the last three months of the tax year. It divides the year into quarters and assumes assets are placed in service at the midpoint of the quarter.

Identify the convention NOT used under MACRS: The full-month convention is not part of MACRS. This convention assumes assets are placed in service or disposed of at the beginning of a specific month, but it is not used under MACRS.