Question 1

Match the terms with the definitions.
-If one asset is traded in on the purchase of another similar asset, an allowance may be granted.

Accepted Answer

A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method 
A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method K

Question 2

When a long-term asset is sold for more than its book value, the difference represents a gain.

Accepted Answer

A) True 
 B)False  True

Question 3

Properties whose physical substance consists of natural resources that are consumed in the operation of a business are called wasting assets.

Accepted Answer

A) True 
 B)False  True

Question 4

Costs and assessments that should NOT be charged to the land account include

Accepted Answer

A)  streets. 
B)  parks. 
C)  installing fences. 
D)  flood prevention. 
A)  streets. 
B)  parks. 
C)  installing fences. 
D)  flood prevention.

Question 5

If a plant asset has been fully depreciated and it is discarded or retired, no gain or loss will be realized.

Accepted Answer

A) True 
 B)False

Question 6

Match the terms with the definitions.
-The practice stating that when in doubt, choose the reporting technique that is least likely to overstate assets or net income.

Accepted Answer

A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method 
A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method

Question 7

Physical depreciation refers to the loss of usefulness because of inadequacy or obsolescence.

Accepted Answer

A) True 
 B)False

Question 8

Use the following data: $$\begin{array} { l r } 
\text { Asset cost } & \$ 80,000 \
\text { Expected life } & 3 \text { years } \
\text { Estimated salvage value } & \$ 10,000
\end{array}$$ ? Using the sum-of-the-year's-digits method, the amount of depreciation for the first year would be

Accepted Answer

A)  $26,666. 
B)  $35,000. 
C)  $20,000. 
D)  $40,000. 
A)  $26,666. 
B)  $35,000. 
C)  $20,000. 
D)  $40,000.

Question 9

Prepare journal entries for the following transactions for Sanchez Co. using the general journal.
Feb. 28
Machinery that cost $57,000 and had accumulated depreciation of $46,000 was sold for $2,500.
Apr. 10
A van that cost $23,700 and had accumulated depreciation of $21,000 was sold for $1,250.
July 16
Equipment that cost $120,000 and had accumulated depreciation of $112,000 was traded in for new equipment with a fair market value of $140,000. The old equipment and $135,000 in cash were given for the new equipment.
Aug. 11
Equipment that cost $50,000 and had accumulated depreciation of $43,000 was traded in for new equipment with a fair market value of $62,000. The old equipment and $55,000 in cash were given for the new equipment.
Nov. 10
A truck that cost $44,000 and had accumulated depreciation of $38,000 was traded in for a new truck with a fair market value of $58,000. The old truck and $50,000 cash were given for the new truck.
​

Accepted Answer

The answer of Prepare journal entries for the following transactions...

Question 10

Match the terms with the definitions.
-The sum of all amounts spent to acquire an asset and prepare it for its intended use.

Accepted Answer

A) Accelerated Cost Recovery System (ACRS) 
B) accelerated depreciation methods 
C) amortization 
D) trademark 
E) cash equivalent price
F)long-term assets
G)copyright
H)cost
I)patent
J)depreciable cost (base)
K)depreciation
L)physical depreciation
M)tangible assets
N)sum-of-the-years'-digits method
O)salvage value
P)property, plant, and equipment 
A) Accelerated Cost Recovery System (ACRS) 
B) accelerated depreciation methods 
C) amortization 
D) trademark 
E) cash equivalent price
F)long-term assets
G)copyright
H)cost
I)patent
J)depreciable cost (base)
K)depreciation
L)physical depreciation
M)tangible assets
N)sum-of-the-years'-digits method
O)salvage value
P)property, plant, and equipment

Question 11

Match the terms with the definitions.
-Assets that are expected to provide benefits for a number of accounting periods.

Accepted Answer

A) Accelerated Cost Recovery System (ACRS) 
B) accelerated depreciation methods 
C) amortization 
D) trademark 
E) cash equivalent price
F)long-term assets
G)copyright
H)cost
I)patent
J)depreciable cost (base)
K)depreciation
L)physical depreciation
M)tangible assets
N)sum-of-the-years'-digits method
O)salvage value
P)property, plant, and equipment 
A) Accelerated Cost Recovery System (ACRS) 
B) accelerated depreciation methods 
C) amortization 
D) trademark 
E) cash equivalent price
F)long-term assets
G)copyright
H)cost
I)patent
J)depreciable cost (base)
K)depreciation
L)physical depreciation
M)tangible assets
N)sum-of-the-years'-digits method
O)salvage value
P)property, plant, and equipment

Question 12

Match the terms with the definitions.
-A grant by the federal government to an inventor giving the exclusive right to produce, use, and sell an invention for a period of twenty years.

Accepted Answer

A) Accelerated Cost Recovery System (ACRS) 
B) accelerated depreciation methods 
C) amortization 
D) trademark 
E) cash equivalent price
F)long-term assets
G)copyright
H)cost
I)patent
J)depreciable cost (base)
K)depreciation
L)physical depreciation
M)tangible assets
N)sum-of-the-years'-digits method
O)salvage value
P)property, plant, and equipment 
A) Accelerated Cost Recovery System (ACRS) 
B) accelerated depreciation methods 
C) amortization 
D) trademark 
E) cash equivalent price
F)long-term assets
G)copyright
H)cost
I)patent
J)depreciable cost (base)
K)depreciation
L)physical depreciation
M)tangible assets
N)sum-of-the-years'-digits method
O)salvage value
P)property, plant, and equipment

Question 13

The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated useful life in terms of months or years is called accelerated depreciation.

Accepted Answer

A) True 
 B)False

Question 14

The depreciation method that estimates the number of units of service or output that can be provided by an asset and allocates the depreciable cost of the asset on the basis of the use or output during each period is called the

Accepted Answer

A)  declining-balance method. 
B)  sum-of-the-years'-digit method. 
C)  units-of-production method. 
D)  straight-line method. 
A)  declining-balance method. 
B)  sum-of-the-years'-digit method. 
C)  units-of-production method. 
D)  straight-line method.

Question 15

The loss of usefulness because of inadequacy or obsolescence is called

Accepted Answer

A)  functional depreciation. 
B)  physical depreciation. 
C)  amortization. 
D)  cost allocation. 
A)  functional depreciation. 
B)  physical depreciation. 
C)  amortization. 
D)  cost allocation.

Question 16

Match the terms with the definitions.
-The undepreciated cost of an asset (Cost − Accumulated Depreciation).

Accepted Answer

A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method 
A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method

Question 17

Prepare journal entries for the following transactions for Litton's Lilly PonD.Aug. 7
Replaced the engine in Tractor #1, paying cash, $7,200.
Sept. 17
Paid cash for a tune-up of the engine in Tractor #2, $630.
25
Paid cash to add a front-end loader to Tractor #2, $15,300.
​

Accepted Answer

The answer of Prepare journal entries for the following transactions...

Question 18

Match the terms with the definitions.
-A depreciation method in which the depreciable cost of an asset is allocated equally over the years of the asset's useful life.

Accepted Answer

A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method 
A) Accelerated Cost Recovery System (ACRS) 
B) intangible assets 
C) Modified Accelerated Cost Recovery System (MACRS) 
D) book value 
E) cash equivalent price
F)conservatism
G)straight-line method
H)tangible assets
I)depletion
J)depreciable cost (base)
K)trade-in allowance (trade value)
L)double-declining-balance method
M)functional depreciation
N)units-of-production method

Question 19

An asset should not be depreciated below its estimated salvage value.

Accepted Answer

A) True 
 B)False

Question 20

The allocation of the cost of a plant asset over the periods expected to benefit from its use is called depreciation.

Accepted Answer

A) True 
 B)False

Exam 18: Accounting for Long-Term Assets

Match the terms with the definitions. -If one asset is traded in on the purchase of another similar asset, an allowance may be granted.

When a long-term asset is sold for more than its book value, the difference represents a gain.

Properties whose physical substance consists of natural resources that are consumed in the operation of a business are called wasting assets.

Costs and assessments that should NOT be charged to the land account include

If a plant asset has been fully depreciated and it is discarded or retired, no gain or loss will be realized.

Match the terms with the definitions. -The practice stating that when in doubt, choose the reporting technique that is least likely to overstate assets or net income.

Physical depreciation refers to the loss of usefulness because of inadequacy or obsolescence.

Use the following data: Asset cost \ 80,000 Expected life 3 years Estimated salvage value \ 10,000 ? Using the sum-of-the-year's-digits method, the amount of depreciation for the first year would be

Match the terms with the definitions. -The sum of all amounts spent to acquire an asset and prepare it for its intended use.

Match the terms with the definitions. -Assets that are expected to provide benefits for a number of accounting periods.

Match the terms with the definitions. -A grant by the federal government to an inventor giving the exclusive right to produce, use, and sell an invention for a period of twenty years.

The depreciation method in which the depreciable cost of an asset is apportioned equally over its estimated useful life in terms of months or years is called accelerated depreciation.

The depreciation method that estimates the number of units of service or output that can be provided by an asset and allocates the depreciable cost of the asset on the basis of the use or output during each period is called the

The loss of usefulness because of inadequacy or obsolescence is called

Match the terms with the definitions. -The undepreciated cost of an asset (Cost − Accumulated Depreciation).

Prepare journal entries for the following transactions for Litton's Lilly PonD.Aug. 7 Replaced the engine in Tractor #1, paying cash, $7,200. Sept. 17 Paid cash for a tune-up of the engine in Tractor #2, $630. 25 Paid cash to add a front-end loader to Tractor #2, $15,300. ​

Match the terms with the definitions. -A depreciation method in which the depreciable cost of an asset is allocated equally over the years of the asset's useful life.

An asset should not be depreciated below its estimated salvage value.

The allocation of the cost of a plant asset over the periods expected to benefit from its use is called depreciation.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

Filters

Prepare journal entries for the following transactions for Litton's Lilly PonD.Aug. 7 Replaced the engine in Tractor #1, paying cash, $7,200. Sept. 17 Paid cash for a tune-up of the engine in Tractor #2, $630. 25 Paid cash to add a front-end loader to Tractor #2, $15,300.