Lesson ProgressPhase 5 of 6
Phase 5Assessment
Assessment: Straight-Line Depreciation
Short MCQ exit ticket on straight-line calculation and statement impact
Exit Ticket: Straight-Line Mastery
Sarah is reviewing her first depreciation schedule before sharing it with her accountant. She wants to make sure every number is correct. Test your own understanding with these questions.
What This Checks
- • Calculating annual straight-line depreciation expense
- • Finding book value at a given year
- • Handling partial-year depreciation
- • Understanding statement impact (income statement vs. balance sheet)
Formula Reminder
Annual Expense = (Cost − Salvage Value) ÷ Useful Life
Book Value = Cost − Accumulated Depreciation
Statement Impact
Depreciation Expense → Income Statement (reduces net income)
Accumulated Depreciation → Balance Sheet (reduces book value)
Straight-Line Depreciation Assessment
Demonstrate your understanding of straight-line depreciation calculation and statement impact
1. A machine costs $50,000, has a salvage value of $5,000, and a useful life of 9 years. What is the annual straight-line depreciation expense?
2. Using the same machine ($50,000 cost, $5,000 salvage, 9-year life), what is the book value at the end of Year 3?
3. Why does straight-line depreciation produce the same expense every year?
4. A company buys equipment for $20,000 on July 1. It has a 4-year life and $4,000 salvage value. What is the Year 1 depreciation expense?
5. Where does depreciation expense appear in the financial statements?
6. What happens to book value as accumulated depreciation increases?
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