10. Upon studying the depreciation reserve account for successive periods, what conclusions might be drawn in the case of: (a) A fluctuating reserve? (b) An increasing reserve? (c) A decreasing reserve?
11. Should the depreciation reserve ever serve as a means of financing the replacement of plant equipment?
12. Name the three courses which the management might pursue in financing plant replacements.
13. Explain the secret reserve. Is the policy of carrying a secret reserve advisable? What is the result of carrying too low a reserve?
14. Name the various causes of the appreciation in value of an asset.
15. When is one justified in offsetting depreciation with appreciation?
16. What effect might an over-or under-charge for depreciation have upon the stockholders of the corporation?
Chapter XII
1. Discuss some of the items often considered as cash, and give reasons why many of them should not be included in that account.
2. Explain fully the customary method of receiving stamps as cash payments.