Question 1

During construction of a building, the cost of interest on a construction loan should be charged to an expense account.

Accepted Answer

A) True 
 B)False  False

Question 2

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

Accepted Answer

A)  $2,000 loss 
B)  $2,000 gain 
C)  $1,500 loss 
D)  $3,500 gain 
A)  $2,000 loss 
B)  $2,000 gain 
C)  $1,500 loss 
D)  $3,500 gain B

Question 3

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

Accepted Answer

A) True 
 B)False  False

Question 4

Match the intangible assets described with their proper classification a-d).
-McDonald's golden arches

Accepted Answer

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

Question 5

XYZ Co. incurred the following costs related to the office building used in operating its sports supply company:
a. Replaced a broken window.
b. Replaced the roof that had been on the building 23 years.
c. Serviced all the air conditioners before summer started.
d. Replaced the air conditioners in the customer service areas.
e. Added a warehouse to the back of the building.
f. Repainted the interior walls.
g. Installed window shutters on all windows.

Accepted Answer

a. Revenue expenditure
b. Capital expend

Question 6

Match the intangible assets described with their proper classification a-d).
-Location of a company

Accepted Answer

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

Question 7

The Weber Company purchased a mining site for $1,750,000 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 400,000 tons will be recovered. The estimated residual value of the property is $150,000. During the first year, the company extracted 6,500 tons of ore. The depletion expense is

Accepted Answer

A)  $15,000 
B)  $16,000 
C)  $17,500 
D)  $26,000 
A)  $15,000 
B)  $16,000 
C)  $17,500 
D)  $26,000

Question 8

Regardless of the depreciation method, the amount that will be depreciated during the life of the asset will be the same.

Accepted Answer

A) True 
 B)False

Question 9

Capital expenditures are costs that are charged to stockholders' equity accounts.

Accepted Answer

A) True 
 B)False

Question 10

The higher the fixed asset turnover, the

Accepted Answer

A)  more efficiently a company is using its fixed assets in generating sales 
B)  more efficiently a company is using its intangible assets in generating sales 
C)  less efficiently a company is using its fixed assets in generating sales 
D)  more efficiently a company is using its current assets in generating sales 
A)  more efficiently a company is using its fixed assets in generating sales 
B)  more efficiently a company is using its intangible assets in generating sales 
C)  less efficiently a company is using its fixed assets in generating sales 
D)  more efficiently a company is using its current assets in generating sales

Question 11

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

Accepted Answer

A) True 
 B)False

Question 12

Fill in the missing numbers using the formula for fixed asset turnover:

Accepted Answer

The answer of Fill in the missing numbers using the...

Question 13

Classify each of the following costs associated with long-lived assets as one of the following:
-Supplies materials) used to test new equipment

Accepted Answer

A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment 
A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment

Question 14

On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the second year.

Accepted Answer

A)  $17,500 
B)  $12,500 
C)  $30,000 
D)  $40,000 
A)  $17,500 
B)  $12,500 
C)  $30,000 
D)  $40,000

Question 15

On April 15, Compton Co. paid $2,800 to upgrade a delivery truck and $125 for an oil change. Journalize the entries for the upgrade to delivery truck and oil change expenditures.

Accepted Answer

The answer of On April 15, Compton Co. paid $2,800...

Question 16

A capital expenditure results in a debit to

Accepted Answer

A)  an asset account 
B)  an expense account 
C)  a liability account 
D)  a capital account 
A)  an asset account 
B)  an expense account 
C)  a liability account 
D)  a capital account

Question 17

Match each account name to the financial statement section a-i) in which it would appear.
-Depreciation Expense

Accepted Answer

A) Current Assets 
B) Fixed Assets 
C) Intangible Assets 
D) Current Liability 
E) Long-Term Liability
F)Owners' Equity
G)Revenues
H)Operating Expenses
I)Other Income/Expense 
A) Current Assets 
B) Fixed Assets 
C) Intangible Assets 
D) Current Liability 
E) Long-Term Liability
F)Owners' Equity
G)Revenues
H)Operating Expenses
I)Other Income/Expense

Question 18

Classify each of the following costs associated with long-lived assets as one of the following:
-Fees paid to architect to design new office building

Accepted Answer

A) Buildings 
B) Machinery and equipment 
C) Land 
D) Land improvements 
A) Buildings 
B) Machinery and equipment 
C) Land 
D) Land improvements

Question 19

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of grading and leveling land to be used for a new business site

Accepted Answer

A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment 
A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment

Question 20

Williams Company acquired machinery on July 1, Year 1, at a cost of $130,000. The estimated useful life of the machinery was 10 years and the estimated residual value was $10,000. Williams uses the double-declining-balance method of depreciation. On October 1, Year 4, Williams sold the equipment for $75,000.
1) Record the journal entry for the depreciation on this machinery for Year 4.
2) Record the journal entry for the sale of the machinery.

Accepted Answer

1) $13,000 $130,000 × 0.20 × 6/12)Deprec

Exam 9: Fixed Assets and Intangible Assets

During construction of a building, the cost of interest on a construction loan should be charged to an expense account.

A fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

Match the intangible assets described with their proper classification a-d). -McDonald's golden arches

Match the intangible assets described with their proper classification a-d). -Location of a company

Regardless of the depreciation method, the amount that will be depreciated during the life of the asset will be the same.

Capital expenditures are costs that are charged to stockholders' equity accounts.

The higher the fixed asset turnover, the

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

Fill in the missing numbers using the formula for fixed asset turnover:

Classify each of the following costs associated with long-lived assets as one of the following: -Supplies materials) used to test new equipment

On June 1, Michael Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years or 30,000 hours. Using straight-line depreciation, calculate depreciation expense for the second year.

On April 15, Compton Co. paid $2,800 to upgrade a delivery truck and $125 for an oil change. Journalize the entries for the upgrade to delivery truck and oil change expenditures.

A capital expenditure results in a debit to

Match each account name to the financial statement section a-i) in which it would appear. -Depreciation Expense

Classify each of the following costs associated with long-lived assets as one of the following: -Fees paid to architect to design new office building

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of grading and leveling land to be used for a new business site

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Filters