Louisiana State University, Shreveport

ACCT 701

Chapter 10 Self-Test Indicate whether each of the following statements is true or false.

1)The cost of land includes its purchase price and other related costs, including the cost of

removing an old unusable building that is on the land.

2. Depreciation is the process of valuation of an asset to arrive at its market value.

3. The purpose of depreciation accounting is to provide the cash required to replace plant assets.