Question 1

The entry to record the disposal of a laptop computer with a cost of $2,500 and an accumulated depreciation of $1,500 would be:

Accepted Answer

A) debit Depreciation Expense $2,500;credit Equipment $2,500. 
B) debit Accumulated Depreciation $1,500;debit Loss on Disposal of an Asset $1,000;credit Equipment $2,500. 
C) debit Equipment $2,500;credit Accumulated Depreciation $2,500. 
D) debit Cash $2,500;credit Equipment $2,500. 
A) debit Depreciation Expense $2,500;credit Equipment $2,500. 
B) debit Accumulated Depreciation $1,500;debit Loss on Disposal of an Asset $1,000;credit Equipment $2,500. 
C) debit Equipment $2,500;credit Accumulated Depreciation $2,500. 
D) debit Cash $2,500;credit Equipment $2,500.

Question 2

Revenue expenditures do NOT include:

Accepted Answer

A) additions to existing plant assets. 
B) changing tires on a car. 
C) changing oil in a car. 
D) All of the above are revenue expenditures. 
A) additions to existing plant assets. 
B) changing tires on a car. 
C) changing oil in a car. 
D) All of the above are revenue expenditures.

Question 3

In the last year of useful life,the salvage value was ignored using double declining-balance depreciation.This error would cause:

Accepted Answer

A) the period's end assets to be overstated. 
B) the period's depreciation expense to be understated. 
C) the period end assets to be understated. 
D) None of these is correct. 
A) the period's end assets to be overstated. 
B) the period's depreciation expense to be understated. 
C) the period end assets to be understated. 
D) None of these is correct.

Question 4

The units-of-production method does not take into account the passage of time.

Accepted Answer

A) True 
 B)False

Question 5

What is the difference between an extraordinary repair and a betterment?

Accepted Answer

A) A betterment extends the life of the asset;an extraordinary repair does not. 
B) An extraordinary repair is a capital expenditure;a betterment is not. 
C) An extraordinary repair may extend the life of the asset;a betterment does not. 
D) None of these answers is correct. 
A) A betterment extends the life of the asset;an extraordinary repair does not. 
B) An extraordinary repair is a capital expenditure;a betterment is not. 
C) An extraordinary repair may extend the life of the asset;a betterment does not. 
D) None of these answers is correct.

Question 6

Land is not depreciated.

Accepted Answer

A) True 
 B)False

Question 7

The process of writing off a natural resource is:

Accepted Answer

A) depreciation. 
B) depletion. 
C) amortization. 
D) None of these answers is correct. 
A) depreciation. 
B) depletion. 
C) amortization. 
D) None of these answers is correct.

Question 8

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $15,000,had a useful life of 5 years,no residual value,and an estimated total machine hours of 50,000? Production in year 1 was 10,000 hours.

Accepted Answer

A) $3,000 
B) $4,000 
C) $6,000 
D) $5,000 
A) $3,000 
B) $4,000 
C) $6,000 
D) $5,000

Question 9

Which of the following assets would be classified as property,plant,and equipment?

Accepted Answer

A) Patent 
B) Copyright 
C) Goodwill 
D) Furniture 
A) Patent 
B) Copyright 
C) Goodwill 
D) Furniture

Question 10

An exclusive right to the owner to sell or produce his or her discovery or invention is known as a:

Accepted Answer

A) franchise. 
B) trademark. 
C) patent. 
D) copyright. 
A) franchise. 
B) trademark. 
C) patent. 
D) copyright.

Question 11

Assume an asset costing $90,000 is expected to produce 400,000 units and have a salvage value of $2,000.During year 1,75,000 units were produced;during year 2,68,000 units were produced;and during year 3,70,000 units were produced.Using units-of-production,compute the depreciation expense for each of the three years.

Accepted Answer

Year 1:$16,500 ($90,000 - $2,0

Question 12

If an asset is exchanged for a similar asset,a gain results:

Accepted Answer

A) when the book value of the old asset is greater than what is received for the trade-in allowance. 
B) when the book value of the old asset is less than what is received for the trade-in allowance. 
C) when the accumulated depreciation equals the cost of the old asset. 
D) None of these answers is correct. 
A) when the book value of the old asset is greater than what is received for the trade-in allowance. 
B) when the book value of the old asset is less than what is received for the trade-in allowance. 
C) when the accumulated depreciation equals the cost of the old asset. 
D) None of these answers is correct.

Question 13

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \begin{array} { l } 
\text { Depletion of coal } \
\text { mine }
\end{array} & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 14

What would be the accumulated depreciation at the end of year 6 for a piece of equipment using the straight-line method when the cost is $11,000,residual value is $1,000,and the expected life is 10 years?

Accepted Answer

A) $6,600 
B) $6,000 
C) $1,000 
D) $3,000 
A) $6,600 
B) $6,000 
C) $1,000 
D) $3,000

Question 15

The three categories of writing off plant assets,natural resources,and intangible assets are ________,________,and ________,respectively.

Accepted Answer

Depreciati

Question 16

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column 2 } & \text { Column } 3 & \text { Column } 4 \
\hline \text { Loss from fire } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 17

Intellectual property assets are:

Accepted Answer

A) depreciated. 
B) depleted. 
C) amortized. 
D) expensed. 
A) depreciated. 
B) depleted. 
C) amortized. 
D) expensed.

Question 18

Incidental costs or assessments that should be charged to the Land account include:

Accepted Answer

A) installing a fence. 
B) installing sewers. 
C) clearing the property. 
D) Both B and C are correct. 
A) installing a fence. 
B) installing sewers. 
C) clearing the property. 
D) Both B and C are correct.

Question 19

The cost of a plant asset did NOT include installation costs that were expensed.This error would cause:

Accepted Answer

A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be understated. 
D) Both B and C are correct. 
A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be understated. 
D) Both B and C are correct.

Question 20

A company purchased new machinery and incurred freight,assembly,and installation costs in addition to the invoice cost of the machinery.These additional costs should be debited to:

Accepted Answer

A) Miscellaneous Expense. 
B) Machinery. 
C) Installation Expense. 
D) Machinery Expense. 
A) Miscellaneous Expense. 
B) Machinery. 
C) Installation Expense. 
D) Machinery Expense.

Exam 16: Accounting for Property,plant,equipment,and Intangible Assets

The entry to record the disposal of a laptop computer with a cost of $2,500 and an accumulated depreciation of $1,500 would be:

Revenue expenditures do NOT include:

In the last year of useful life,the salvage value was ignored using double declining-balance depreciation.This error would cause:

The units-of-production method does not take into account the passage of time.

What is the difference between an extraordinary repair and a betterment?

Land is not depreciated.

The process of writing off a natural resource is:

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $15,000,had a useful life of 5 years,no residual value,and an estimated total machine hours of 50,000? Production in year 1 was 10,000 hours.

Which of the following assets would be classified as property,plant,and equipment?

An exclusive right to the owner to sell or produce his or her discovery or invention is known as a:

If an asset is exchanged for a similar asset,a gain results:

What would be the accumulated depreciation at the end of year 6 for a piece of equipment using the straight-line method when the cost is $11,000,residual value is $1,000,and the expected life is 10 years?

The three categories of writing off plant assets,natural resources,and intangible assets are ________,________,and ________,respectively.

Intellectual property assets are:

Incidental costs or assessments that should be charged to the Land account include:

The cost of a plant asset did NOT include installation costs that were expensed.This error would cause:

A company purchased new machinery and incurred freight,assembly,and installation costs in addition to the invoice cost of the machinery.These additional costs should be debited to:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

The three categories of writing off plant assets,natural resources,and intangible assets are ,,and ,respectively.