Question 1

Once the estimated depreciation for an asset is calculated

Accepted Answer

A)  It cannot be changed due to the historical cost principle 
B)  It may be revised based on new information 
C)  Any changes are accumulated and recognized when the asset is sold 
D)  The estimate itself cannot be changed, however, new information should be disclosed in financial statement footnotes 
E)  It may be revised based on new information and any changes are accumulated and recognized when the asset is sold 
A)  It cannot be changed due to the historical cost principle 
B)  It may be revised based on new information 
C)  Any changes are accumulated and recognized when the asset is sold 
D)  The estimate itself cannot be changed, however, new information should be disclosed in financial statement footnotes 
E)  It may be revised based on new information and any changes are accumulated and recognized when the asset is sold

Question 2

On the balance sheet, it is not necessary to report both the cost and the accumulated depreciation of an asset.

Accepted Answer

A) True 
 B)False

Question 3

The gain or loss from disposal of property, plant and equipment is the difference between an asset's book value and the value received.

Accepted Answer

A) True 
 B)False

Question 4

On April 1, 2020, Hogan Industries scrapped a machine that cost $10,000 and had accumulated depreciation through December 31, 2019, of $10,000. Prepare the journal entry to record the disposal of the machine.

Accepted Answer

The answer of On April 1, 2020, Hogan Industries scrapped...

Question 5

The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

Accepted Answer

A) True 
 B)False

Question 6

SportsWorld purchased a machine for $190,000. The machine has a useful life of 8 years and a residual value of $10,000. SportsWorld estimates that the machine could produce 750,000 units of product over its useful life. In the first year, 95,000 units were produced. In the second year, production increased to 111,000 units. Using the units-of-production method, what is the amount of depreciation that should be recorded for the second year?

Accepted Answer

A)  $26,640 
B)  $22,800 
C)  $28,000 
D)  $36,000 
E)  $49,440 
A)  $26,640 
B)  $22,800 
C)  $28,000 
D)  $36,000 
E)  $49,440

Question 7

A leasehold

Accepted Answer

A)  Is a short-term rental agreement 
B)  Is not an intangible asset 
C)  Refers to the rights granted to the lessee by the lessor in a lease 
D)  Is initially recorded as rent expense 
E)  Is an investment 
A)  Is a short-term rental agreement 
B)  Is not an intangible asset 
C)  Refers to the rights granted to the lessee by the lessor in a lease 
D)  Is initially recorded as rent expense 
E)  Is an investment

Question 8

The original cost of an asset minus accumulated depreciation is called

Accepted Answer

A)  Historical cost 
B)  Book value 
C)  Present value 
D)  Current value 
E)  Replacement cost 
A)  Historical cost 
B)  Book value 
C)  Present value 
D)  Current value 
E)  Replacement cost

Question 9

Sports Med sold an X-ray machine that originally cost $100,000 for $60,000. The accumulated depreciation on the machine to the date of sale was $40,000. On this sale, Sports Med should recognize:

Accepted Answer

A)  $0 gain or loss 
B)  $20,000 gain 
C)  $25,000 gain 
D)  $40,000 loss 
E)  $60,000 gain 
A)  $0 gain or loss 
B)  $20,000 gain 
C)  $25,000 gain 
D)  $40,000 loss 
E)  $60,000 gain

Question 10

The formula for calculating straight-line depreciation is

Accepted Answer

A)  Depreciable cost divided by the useful life in years 
B)  Cost plus residual value divided by the useful life in years 
C)  Depreciable cost divided by useful life in units 
D)  Cost divided by useful life in years 
E)  Cost divided by useful life in units 
A)  Depreciable cost divided by the useful life in years 
B)  Cost plus residual value divided by the useful life in years 
C)  Depreciable cost divided by useful life in units 
D)  Cost divided by useful life in years 
E)  Cost divided by useful life in units

Question 11

Depreciation is usually recorded

Accepted Answer

A)  From the beginning of the accounting year in which an asset is purchased 
B)  From the actual date of purchase 
C)  From the first of the month nearest the actual purchase date 
D)  From the end of the month nearest the actual purchase date 
E)  By any of the above methods 
A)  From the beginning of the accounting year in which an asset is purchased 
B)  From the actual date of purchase 
C)  From the first of the month nearest the actual purchase date 
D)  From the end of the month nearest the actual purchase date 
E)  By any of the above methods

Question 12

Land improvements are

Accepted Answer

A)  Assets that increase the usefulness of land, but that have a limited useful life 
B)  Assets that increase the usefulness of land, and like land are not depreciated 
C)  Included in the land account 
D)  Expensed in the period incurred 
E)  Never depreciated 
A)  Assets that increase the usefulness of land, but that have a limited useful life 
B)  Assets that increase the usefulness of land, and like land are not depreciated 
C)  Included in the land account 
D)  Expensed in the period incurred 
E)  Never depreciated

Question 13

SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to Store Building.

Accepted Answer

A) True 
 B)False

Question 14

On April 1, Fog Company traded an old machine that originally cost $32,000 and had been depreciated $24,000 for a new machine that had a cash price of $40,000. Assuming that this transaction has commercial substance,(1) Prepare the journal entry to record the exchange under the assumption that a $5,000 trade-in allowance was received and the balance was paid in cash.(2) Prepare the journal entry to record the exchange under the assumption that instead of a $5,000 trade-in allowance, a $12,500 trade-in allowance was received and the balance was paid in cash.

Accepted Answer

The answer of On April 1, Fog Company traded an...

Question 15

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each accounting period during its useful life is called

Accepted Answer

A)  Accelerated depreciation 
B)  Double-declining-balance depreciation 
C)  Straight-line depreciation 
D)  Units-of-production depreciation 
E)  Capital cost allowance 
A)  Accelerated depreciation 
B)  Double-declining-balance depreciation 
C)  Straight-line depreciation 
D)  Units-of-production depreciation 
E)  Capital cost allowance

Question 16

The cost of an asset plus its accumulated depreciation equals the asset's book value.

Accepted Answer

A) True 
 B)False

Question 17

At the end of the year, SportsWorld completed an asset impairment test and noted that a piece of equipment, with a book value of 12,000, has a recoverable value of $2,000. Calculate the amount of impairment loss on the equipment.

Accepted Answer

A)  $2,000 
B)  $2,160 
C)  $14,800 
D)  $12,800 
E)  $10,000 
A)  $2,000 
B)  $2,160 
C)  $14,800 
D)  $12,800 
E)  $10,000

Question 18

Primadonna Company paid $870,000 plus $10,000 in legal costs for a parcel of real estate. This included land appraised at $450,000; land improvements appraised at $170,000; and a building appraised at $380,000. The plan is to use the building as a manufacturing plant. Determine the amounts that should be debited to:
 $$\begin{array} { | l | c | } 
\hline \text { (a) Land } & \$\_ \
\hline \text { (b) Land Improvements } & \$\_ \
\hline \text { (c) Buidirg } & \$\_ \
\hline
\end{array}$$

Accepted Answer

The answer of Primadonna Company paid $870,000 plus $10,000 in...

Question 19

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each unit produced is called

Accepted Answer

A)  Accelerated depreciation 
B)  Double-declining-balance depreciation 
C)  Straight-line depreciation 
D)  Units-of-production depreciation 
E)  Capital cost allowance 
A)  Accelerated depreciation 
B)  Double-declining-balance depreciation 
C)  Straight-line depreciation 
D)  Units-of-production depreciation 
E)  Capital cost allowance

Question 20

Natural resources

Accepted Answer

A)  Include trees, mineral deposits, and oil and gas fields 
B)  Are consumed when used 
C)  Are long-term assets 
D)  Can be amortized. 
E)  All of these 
A)  Include trees, mineral deposits, and oil and gas fields 
B)  Are consumed when used 
C)  Are long-term assets 
D)  Can be amortized. 
E)  All of these

Once the estimated depreciation for an asset is calculated

On the balance sheet, it is not necessary to report both the cost and the accumulated depreciation of an asset.

The gain or loss from disposal of property, plant and equipment is the difference between an asset's book value and the value received.

On April 1, 2020, Hogan Industries scrapped a machine that cost $10,000 and had accumulated depreciation through December 31, 2019, of $10,000. Prepare the journal entry to record the disposal of the machine.

The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

A leasehold

The original cost of an asset minus accumulated depreciation is called

Sports Med sold an X-ray machine that originally cost $100,000 for $60,000. The accumulated depreciation on the machine to the date of sale was $40,000. On this sale, Sports Med should recognize:

The formula for calculating straight-line depreciation is

Depreciation is usually recorded

Land improvements are

SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to Store Building.

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each accounting period during its useful life is called

The cost of an asset plus its accumulated depreciation equals the asset's book value.

At the end of the year, SportsWorld completed an asset impairment test and noted that a piece of equipment, with a book value of 12,000, has a recoverable value of $2,000. Calculate the amount of impairment loss on the equipment.

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each unit produced is called

Natural resources

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Payroll Liabilities

Accounting Information Systems

Filters

Exam 9: Property, Plant and Equipment Intangibles

Once the estimated depreciation for an asset is calculated

On the balance sheet, it is not necessary to report both the cost and the accumulated depreciation of an asset.

The gain or loss from disposal of property, plant and equipment is the difference between an asset's book value and the value received.

On April 1, 2020, Hogan Industries scrapped a machine that cost $10,000 and had accumulated depreciation through December 31, 2019, of $10,000. Prepare the journal entry to record the disposal of the machine.

The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

A leasehold

The original cost of an asset minus accumulated depreciation is called

Sports Med sold an X-ray machine that originally cost $100,000 for $60,000. The accumulated depreciation on the machine to the date of sale was $40,000. On this sale, Sports Med should recognize:

The formula for calculating straight-line depreciation is

Depreciation is usually recorded

Land improvements are

SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to Store Building.

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each accounting period during its useful life is called

The cost of an asset plus its accumulated depreciation equals the asset's book value.

At the end of the year, SportsWorld completed an asset impairment test and noted that a piece of equipment, with a book value of 12,000, has a recoverable value of $2,000. Calculate the amount of impairment loss on the equipment.

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each unit produced is called

Natural resources

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Internal Control and Cash

Receivables

Payroll Liabilities

Accounting Information Systems

Filters