4. Depreciation is simply a process of allocation and not of valuation.

 *
TRUE
FALSE
5. The term "improvements" refers to an expenditure made: *
to improve existing facilities by increasing capacity
to help ensure continuity of service capacity
to restore capacity after abandonment or retirement
for new facilities which increase capacity
6. Small tools and containers used repeatedly for more than a year are classified on the balance sheet
as: *
deferred charges
fixed assets
inventories
current assets
7. The period of time during which the interest on borrowing must be capitalized ends when: *
the asset is substantially complete and ready for its intended use.
the asset is abandoned, sold or fully depreciated
the activities that are necessary to get the asset ready for its intended use have begun
no further interest cost is being incurred