Question 1

A company installed a new engine in their delivery vehicle.This is an example of a(n):

Accepted Answer

A) addition. 
B) betterment. 
C) extraordinary repair 
D) revenue expenditure. 
A) addition. 
B) betterment. 
C) extraordinary repair 
D) revenue expenditure.

Question 2

On January 1,201X,Mayberry Company bought a patent for $50,000.Its estimated useful life is five years.Record the amortization for the first two years.

Accepted Answer

The answer of On January 1,201X,Mayberry Company bought a patent...

Question 3

Which depreciation method uses twice the straight-line rate?

Accepted Answer

A) Units-of-production 
B) Modified accelerated cost recovery 
C) Straight-line 
D) Double declining-balance 
A) Units-of-production 
B) Modified accelerated cost recovery 
C) Straight-line 
D) Double declining-balance

Question 4

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).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column 2 } & \text { Column } 3 & \text { Column } 4 \
\hline \text { Amortization } & & & & \
\text { Expense, Patent } & & & & \
\hline
\end{array}$$

Accepted Answer

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

Question 5

For tax purposes,equipment is depreciated using the straight-line method under MACRS.

Accepted Answer

A) True 
 B)False

Question 6

Double declining balance depreciation is used in the first year when straight line depreciation should be used.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 overstated. 
D) None of these is 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 overstated. 
D) None of these is correct.

Question 7

The Cutcut Mower Service owned a truck with an original cost of $75,000 on which there is accumulated depreciation of $55,000.The truck is exchanged for a new truck priced at $90,000 with a trade-in allowance of $12,000 and the balance in cash.
a.The book value of the old truck is ________.
b.The loss on the exchange is ________.
c.The cost basis in the new truck,assuming accounting rules is ________.

Accepted Answer

a.$20,000

Question 8

What would the depreciation expense be in year 5 for a computer system using the straight-line method when cost is $16,000,residual value is $2,000,and the expected life is 7 years?

Accepted Answer

A) $2,000 
B) $1,500 
C) $1,250 
D) $1,000 
A) $2,000 
B) $1,500 
C) $1,250 
D) $1,000

Question 9

The amount to include in the entry to record the cost of a property,plant,and equipment asset would NOT include:

Accepted Answer

A) acquisition cost. 
B) routine maintenance costs. 
C) installation. 
D) All of these answers are correct. 
A) acquisition cost. 
B) routine maintenance costs. 
C) installation. 
D) All of these answers are correct.

Question 10

Some of the past depreciation is canceled in recording an extraordinary repair.

Accepted Answer

A) True 
 B)False

Question 11

If an asset is being sold or exchanged,the gain or loss is always computed by comparing the:

Accepted Answer

A) market value and cost. 
B) book value and salvage value. 
C) market value and salvage value. 
D) market value and book value. 
A) market value and cost. 
B) book value and salvage value. 
C) market value and salvage value. 
D) market value and book value.

Question 12

The intangible that is recorded when a business is purchased for more than the fair value of the net assets is known as ________.

Accepted Answer

The answer of The intangible that is recorded when a...

Question 13

Assets that are expected to provide benefits for a number of accounting periods are called:

Accepted Answer

A) current assets. 
B) fixed assets. 
C) long-term assets. 
D) property,plant,and equipment. 
A) current assets. 
B) fixed assets. 
C) long-term assets. 
D) property,plant,and equipment.

Question 14

If a coal deposit has 700,000 tons available and was purchased for $1,750,000,record the removal of 50,000 tons in year 1 and 70,000 tons in year 2.

Accepted Answer

The answer of If a coal deposit has 700,000 tons...

Question 15

A coal mine was acquired for $4,000,000.No salvage value was expected and the number of tons of coal is estimated to be 2,000,000 tons.During for first year,200,000 tons of coal was mined and sold.The depletion expense is:

Accepted Answer

A) $2,000,000. 
B) $200,000. 
C) $4,000,000. 
D) $400,000. 
A) $2,000,000. 
B) $200,000. 
C) $4,000,000. 
D) $400,000.

Question 16

A budgeted item such as a building is listed as a ________.

Accepted Answer

The answer of A budgeted item such as a building...

Question 17

Myers Corporation exchanged an old machine costing $20,000,with an accumulated depreciation of $17,000,and trade-in value of $5,000 for a new machine cash price of $24,000.What is the journal entry?

Accepted Answer

A) Debit Machinery $22,000;debit Accumulated Depreciation $17,000;credit Machinery $20,000;credit Cash $19,000 
B) Debit Machinery $19,000;debit Accumulated Depreciation $17,000;credit Gain on Disposal of Plant Asset $3,000;credit Machinery $20,000;credit Cash $19,000 
C) Debit Machinery $24,000;debit Accumulated Depreciation $17,000;credit Machinery $20,000;credit Cash $19,000;credit Gain on Disposal $3,000 
D) None of these answers is correct. 
A) Debit Machinery $22,000;debit Accumulated Depreciation $17,000;credit Machinery $20,000;credit Cash $19,000 
B) Debit Machinery $19,000;debit Accumulated Depreciation $17,000;credit Gain on Disposal of Plant Asset $3,000;credit Machinery $20,000;credit Cash $19,000 
C) Debit Machinery $24,000;debit Accumulated Depreciation $17,000;credit Machinery $20,000;credit Cash $19,000;credit Gain on Disposal $3,000 
D) None of these answers is correct.

Question 18

A company incorrectly records revenue expenditures as capital expenditures on its books.As a result,which of the following will be true?

Accepted Answer

A) Net income will be overstated for the year. 
B) Owner's equity will be understated at year-end. 
C) Total assets will be understated at year-end. 
D) None of the above will occur. 
A) Net income will be overstated for the year. 
B) Owner's equity will be understated at year-end. 
C) Total assets will be understated at year-end. 
D) None of the above will occur.

Question 19

The depreciation method which charges more expense in earlier years than in later years is the:

Accepted Answer

A) straight-line method. 
B) double declining-balance method. 
C) units-of-production method. 
D) All of the above are correct. 
A) straight-line method. 
B) double declining-balance method. 
C) units-of-production method. 
D) All of the above are correct.

Question 20

The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account.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 overstated. 
D) None of these is 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 overstated. 
D) None of these is correct.

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

A company installed a new engine in their delivery vehicle.This is an example of a(n):

On January 1,201X,Mayberry Company bought a patent for $50,000.Its estimated useful life is five years.Record the amortization for the first two years.

Which depreciation method uses twice the straight-line rate?

For tax purposes,equipment is depreciated using the straight-line method under MACRS.

Double declining balance depreciation is used in the first year when straight line depreciation should be used.This error would cause:

What would the depreciation expense be in year 5 for a computer system using the straight-line method when cost is $16,000,residual value is $2,000,and the expected life is 7 years?

The amount to include in the entry to record the cost of a property,plant,and equipment asset would NOT include:

Some of the past depreciation is canceled in recording an extraordinary repair.

If an asset is being sold or exchanged,the gain or loss is always computed by comparing the:

The intangible that is recorded when a business is purchased for more than the fair value of the net assets is known as ________.

Assets that are expected to provide benefits for a number of accounting periods are called:

If a coal deposit has 700,000 tons available and was purchased for $1,750,000,record the removal of 50,000 tons in year 1 and 70,000 tons in year 2.

A coal mine was acquired for $4,000,000.No salvage value was expected and the number of tons of coal is estimated to be 2,000,000 tons.During for first year,200,000 tons of coal was mined and sold.The depletion expense is:

A budgeted item such as a building is listed as a ________.

Myers Corporation exchanged an old machine costing $20,000,with an accumulated depreciation of $17,000,and trade-in value of $5,000 for a new machine cash price of $24,000.What is the journal entry?

A company incorrectly records revenue expenditures as capital expenditures on its books.As a result,which of the following will be true?

The depreciation method which charges more expense in earlier years than in later years is the:

The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account.This error would cause:

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

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