Question 1

Match each account name to the financial statement section a-i) in which it would appear.
-Research and Development Costs

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 2

Computer equipment was acquired at the beginning of the year at a cost of $63,000 that has an estimated residual value of $3,000 and an estimated useful life of 5 years. Determine the a) depreciable cost b) double-declining-balance rate, and c) double-declining-balance depreciation for the first year.

Accepted Answer

a) $60,000

Question 3

Revising depreciation estimates affects the amounts of depreciation expense recorded in past periods.

Accepted Answer

A) True 
 B)False

Question 4

Accumulated Depreciation

Accepted Answer

A)  is the same as Depreciation Expense 
B)  is used to show the amount of cost expiration of intangibles 
C)  is a contra asset account 
D)  is used to show the amount of cost expiration of natural resources 
A)  is the same as Depreciation Expense 
B)  is used to show the amount of cost expiration of intangibles 
C)  is a contra asset account 
D)  is used to show the amount of cost expiration of natural resources

Question 5

On July 1, Andrew Company purchased equipment at a cost of $150,000 that has a depreciable cost of $120,000 and an estimated useful life of 3 years or 60,000 hours.
Using straight-line depreciation, prepare the journal entry to record depreciation expense for a) the first year, b) the second year, and c) the last year.

Accepted Answer

$120,000 ÷ 3 years = $40,000 per full ye

Question 6

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of installing 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 7

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Accepted Answer

A)  allocation 
B)  depreciation 
C)  amortization 
D)  depletion 
A)  allocation 
B)  depreciation 
C)  amortization 
D)  depletion

Question 8

Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?

Accepted Answer

A)  not enough information to calculate amortization 
B)  $7,000 
C)  $8,000 
D)  goodwill is not amortized 
A)  not enough information to calculate amortization 
B)  $7,000 
C)  $8,000 
D)  goodwill is not amortized

Question 9

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of removing an existing building to ready land for use as 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 10

Which of the following is included in the cost of land?

Accepted Answer

A)  outdoor parking lot lighting attached to the land 
B)  cost of paving a parking lot 
C)  fences on the land 
D)  brokerage commission 
A)  outdoor parking lot lighting attached to the land 
B)  cost of paving a parking lot 
C)  fences on the land 
D)  brokerage commission

Question 11

The cost of replacing an engine in a truck is an example of ordinary maintenance.

Accepted Answer

A) True 
 B)False

Question 12

All property, plant, and equipment assets are depreciated over time.

Accepted Answer

A) True 
 B)False

Question 13

Classify each of the following as:
-Fixing damage due to a car accident

Accepted Answer

A) Ordinary maintenance and repairs 
B) Asset improvements 
C) Extraordinary repairs 
A) Ordinary maintenance and repairs 
B) Asset improvements 
C) Extraordinary repairs

Question 14

When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the following:

Accepted Answer

A)  debit Machinery; credit Cash and Accumulated Depreciation 
B)  debit Cash and Machinery; credit Accumulated Depreciation 
C)  debit Cash and Depreciation Expense; credit Accumulated Depreciation 
D)  debit Cash and Accumulated Depreciation; credit Machinery 
A)  debit Machinery; credit Cash and Accumulated Depreciation 
B)  debit Cash and Machinery; credit Accumulated Depreciation 
C)  debit Cash and Depreciation Expense; credit Accumulated Depreciation 
D)  debit Cash and Accumulated Depreciation; credit Machinery

Question 15

Expected useful life is

Accepted Answer

A)  calculated when the asset is sold 
B)  estimated at the time that the asset is placed in service 
C)  determined each year that the depreciation calculation is made 
D)  none of these 
A)  calculated when the asset is sold 
B)  estimated at the time that the asset is placed in service 
C)  determined each year that the depreciation calculation is made 
D)  none of these

Question 16

When minor errors occur in the estimates used in the determination of depreciation, the amounts recorded for depreciation expense in the past should be corrected.

Accepted Answer

A) True 
 B)False

Question 17

Expenditures that add to the utility of fixed assets for more than one accounting period are

Accepted Answer

A)  capital expenditures 
B)  revenue expenditures 
C)  utility expenditures 
D)  committed expenditures 
A)  capital expenditures 
B)  revenue expenditures 
C)  utility expenditures 
D)  committed expenditures

Question 18

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of 8 years. Determine the a) depreciable cost, b) straight-line rate, and c) annual straight-line depreciation.

Accepted Answer

The answer of Computer equipment was acquired at the beginning...

Question 19

The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record

Accepted Answer

A)  a loss of $1,500 
B)  the new machinery at $16,700 
C)  a gain of $1,500 
D)  the new machinery at $12,700 
A)  a loss of $1,500 
B)  the new machinery at $16,700 
C)  a gain of $1,500 
D)  the new machinery at $12,700

Question 20

Comment on the validity of the following statements. "As an asset loses its ability to provide services, cash needs to be set aside to replace it. Depreciation accomplishes this goal."

Accepted Answer

Depreciation is the periodic t

Exam 9: Fixed Assets and Intangible Assets

Match each account name to the financial statement section a-i) in which it would appear. -Research and Development Costs

Revising depreciation estimates affects the amounts of depreciation expense recorded in past periods.

Accumulated Depreciation

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of installing new equipment

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Xtra Company purchased a business from Argus for $96,000 above the fair value of its net assets. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of removing an existing building to ready land for use as a new business site

Which of the following is included in the cost of land?

The cost of replacing an engine in a truck is an example of ordinary maintenance.

All property, plant, and equipment assets are depreciated over time.

Classify each of the following as: -Fixing damage due to a car accident

When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the following:

Expected useful life is

When minor errors occur in the estimates used in the determination of depreciation, the amounts recorded for depreciation expense in the past should be corrected.

Expenditures that add to the utility of fixed assets for more than one accounting period are

Computer equipment was acquired at the beginning of the year at a cost of $65,000 that has an estimated residual value of $3,800 and an estimated useful life of 8 years. Determine the a) depreciable cost, b) straight-line rate, and c) annual straight-line depreciation.

The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record

Comment on the validity of the following statements. "As an asset loses its ability to provide services, cash needs to be set aside to replace it. Depreciation accomplishes this goal."

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

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