Grade 12 Accounting Methods Worksheet
This worksheet covers key accounting methods for Grade 12 students, including depreciation, inventory valuation, and cash vs. accrual basis accounting.
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Grade 12 Accounting Methods
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Read each question carefully and provide your answers in the space provided. Show all calculations where applicable.
1. Which depreciation method allocates an equal amount of depreciation expense to each period of an asset's useful life?
Declining-balance method
Units-of-production method
Straight-line method
Sum-of-the-years' digits method
2. Under the FIFO inventory costing method, which costs are assumed to be sold first?
The most recently purchased costs
The oldest costs in inventory
The average cost of all inventory
Specific identified costs
1. The method recognizes revenues when cash is received and expenses when cash is paid.
2. Under the inventory method, it is assumed that the last goods purchased are the first ones sold.
1. The accrual basis of accounting is generally considered to provide a more accurate picture of a company's financial performance than the cash basis.
True
False
2. Depreciation is applied to all assets, including land.
True
False
1. A company purchases equipment for $50,000. It has an estimated useful life of 5 years and a salvage value of $5,000. Calculate the annual depreciation expense using the straight-line method.
2. Explain the main difference between the cash basis and accrual basis of accounting.
Match each accounting term on the left with its definition on the right.
1. Depreciation
a. An inventory costing method where the most recent costs are assumed to be sold first.
2. FIFO
b. The systematic allocation of the cost of a tangible asset over its useful life.
3. LIFO
c. An inventory costing method where the oldest costs are assumed to be sold first.