Question 1

On the balance sheet, the cumulative amount of plant and equipment already expensed is reported in an account called

Accepted Answer

A) Accumulated Amortization 
B) Accumulated Depreciation 
C) Amortization Expense 
D) Depreciation Expense 
A) Accumulated Amortization 
B) Accumulated Depreciation 
C) Amortization Expense 
D) Depreciation Expense

Question 2

What was the book value of the ship for Paulson Transport at the end of the useful life?

Accepted Answer

A) $ -0- 
B) $ 50,000 
C) $214,400 
D) Need more information to determine this answer. 
A) $ -0- 
B) $ 50,000 
C) $214,400 
D) Need more information to determine this answer.

Question 3

Interest is capitalized when incurred in connection with the construction of plant assets because

Accepted Answer

A) interest is considered a part of the acquisition cost of the related plant asset. 
B) the decision to purchase a plant asset is a business decision separate from the financing decision. 
C) many plant assets last longer than 20 years. 
D) interest is considered an expense of the period. 
A) interest is considered a part of the acquisition cost of the related plant asset. 
B) the decision to purchase a plant asset is a business decision separate from the financing decision. 
C) many plant assets last longer than 20 years. 
D) interest is considered an expense of the period.

Question 4

Paulson Transport Company
On January 1, 2015, Paulson Transport Company purchased a ship for $2,000,000.It has a ten-year useful life and a residual value of $50,000.The company uses the double-declining-balance method.
-What was the depreciation expense for Paulson Transport for the year ended December 31, 2015?

Accepted Answer

A) $ -0- 
B) $195,000 
C) $390,000 
D) $400,000 
A) $ -0- 
B) $195,000 
C) $390,000 
D) $400,000

Question 5

isare) a costs) that improves an operating asset and is are) added to the asset account.

Accepted Answer

The answer of isare) a costs) that improves an operating...

Question 6

Waxman Company purchased a patent for $170,000 at the beginning of 2013, and estimated that its expected useful life was 10 years.The patent has a legal life of 17 years.What amount should be recorded as amortization expense for the patent in 2013?

Accepted Answer

A) $ -0- 
B) $ 7,000 
C) $10,000 
D) $17,000 
A) $ -0- 
B) $ 7,000 
C) $10,000 
D) $17,000

Question 7

Fortune Company has 10 delivery trucks that became fully depreciated in the prior year.Fortune will continue charging the same amount of depreciation as before so that there will be no decrease in expenses.

Accepted Answer

A) True 
 B)False

Question 8

Plant assets are depreciated because

Accepted Answer

A) the accrual basis of accounting requires matching of costs to revenues. 
B) some plant assets last longer than others. 
C) useful lives cannot be reasonably estimated. 
D) the replacement cost of plant assets may fluctuate over time. 
A) the accrual basis of accounting requires matching of costs to revenues. 
B) some plant assets last longer than others. 
C) useful lives cannot be reasonably estimated. 
D) the replacement cost of plant assets may fluctuate over time.

Question 9

Royal Company purchased a dump truck at the beginning of 2012 at a cost of $60,000.The truck had an estimated life of 6 years and an estimated residual value of $24,000.On January 1, 2014, the company made major repairs of $20,000 to the truck that extended the life 1 year.Thus, starting with 2014, the truck has a remaining life of 5 years and a new salvage value of $8,000.Royal uses the straight-line depreciation method.What is the book value of the truck to be reported on the balance sheet at December 31, 2014?

Accepted Answer

A) $44,000 
B) $50,000 
C) $56,000 
D) $62,000 
A) $44,000 
B) $50,000 
C) $56,000 
D) $62,000

Question 10

Interest is capitalized on all purchased assets.

Accepted Answer

A) True 
 B)False

Question 11

When constructing assets, capitalized interest is based on

Accepted Answer

A) the amount allowed by the company's auditors. 
B) the expenditures at the end of the of the period. 
C) the expenditures at the beginning of the period. 
D) the average accumulated expenditures. 
A) the amount allowed by the company's auditors. 
B) the expenditures at the end of the of the period. 
C) the expenditures at the beginning of the period. 
D) the average accumulated expenditures.

Question 12

Operating assets with no physical properties are called

Accepted Answer

A) current assets 
B) intangible assets 
C) plant assets 
D) property, plant, and equipment 
A) current assets 
B) intangible assets 
C) plant assets 
D) property, plant, and equipment

Question 13

Plant assets, current assets, property, plant and equipment, and fixed assets are all tangible assets.

Accepted Answer

A) True 
 B)False

Question 14

If a company chooses to treat small plant asset expenditures as expenses, GAAP are being violated.

Accepted Answer

A) True 
 B)False

Question 15

The income statement of Hope Market, Inc.reported a gain from the sale of land.How are the cash flow effects of this transaction reported on the statement of cash flows if the direct method is used to prepare the Operating Activities category?

Accepted Answer

A) The entire proceeds from the sale of the land are reported as an investing activity. 
B) The gain on the sale of land is reported in the Investing Activities category as a cash flow from the sale of land. 
C) The entire proceeds from the sale of the land are reported as an operating activity. 
D) The cash received from the sale of land is reported in the financing activity category as a cash flow from the sale of land. 
A) The entire proceeds from the sale of the land are reported as an investing activity. 
B) The gain on the sale of land is reported in the Investing Activities category as a cash flow from the sale of land. 
C) The entire proceeds from the sale of the land are reported as an operating activity. 
D) The cash received from the sale of land is reported in the financing activity category as a cash flow from the sale of land.

Question 16

Please complete the following sentences:
a.Accumulated amortization is used with ______________________________________.
b.Accumulated depreciation is used with ______________________________________.

Accepted Answer

a.intangible assets

Question 17

Creighton, Inc.determined that it had incorrectly estimated both the useful life and the estimated residual value of equipment which it purchased 2 years ago.When accounting for the change in its accounting estimates, Creighton must

Accepted Answer

A) correct the financial statements of prior years affected by the errors in the estimates. 
B) determine the book value at the point of change and depreciate that amount over the remaining useful life. 
C) add the amount of the error to the amount of the current year's depreciation expense. 
D) determine the effect of the error and report it as a loss on the income statement in Other Revenues and Expenses. 
A) correct the financial statements of prior years affected by the errors in the estimates. 
B) determine the book value at the point of change and depreciate that amount over the remaining useful life. 
C) add the amount of the error to the amount of the current year's depreciation expense. 
D) determine the effect of the error and report it as a loss on the income statement in Other Revenues and Expenses.

Question 18

International accounting standards require companies to revalue their property, plant, and equipment to reflect fair market values.

Accepted Answer

A) True 
 B)False

Question 19

The accounting life of intangible assets is determined by

Accepted Answer

A) their legal lives. 
B) their useful lives. 
C) their legal lives or useful lives, whichever is shorter. 
D) the tax life mandated by the IRS. 
A) their legal lives. 
B) their useful lives. 
C) their legal lives or useful lives, whichever is shorter. 
D) the tax life mandated by the IRS.

Question 20

depreciation is the GAAP depreciation method considered to be "accelerated" in nature.

Accepted Answer

Double dec

On the balance sheet, the cumulative amount of plant and equipment already expensed is reported in an account called

What was the book value of the ship for Paulson Transport at the end of the useful life?

Interest is capitalized when incurred in connection with the construction of plant assets because

isare) a costs) that improves an operating asset and is are) added to the asset account.

Waxman Company purchased a patent for $170,000 at the beginning of 2013, and estimated that its expected useful life was 10 years.The patent has a legal life of 17 years.What amount should be recorded as amortization expense for the patent in 2013?

Fortune Company has 10 delivery trucks that became fully depreciated in the prior year.Fortune will continue charging the same amount of depreciation as before so that there will be no decrease in expenses.

Plant assets are depreciated because

Interest is capitalized on all purchased assets.

When constructing assets, capitalized interest is based on

Operating assets with no physical properties are called

Plant assets, current assets, property, plant and equipment, and fixed assets are all tangible assets.

If a company chooses to treat small plant asset expenditures as expenses, GAAP are being violated.

The income statement of Hope Market, Inc.reported a gain from the sale of land.How are the cash flow effects of this transaction reported on the statement of cash flows if the direct method is used to prepare the Operating Activities category?

Please complete the following sentences: a.Accumulated amortization is used with . b.Accumulated depreciation is used with .

Creighton, Inc.determined that it had incorrectly estimated both the useful life and the estimated residual value of equipment which it purchased 2 years ago.When accounting for the change in its accounting estimates, Creighton must

International accounting standards require companies to revalue their property, plant, and equipment to reflect fair market values.

The accounting life of intangible assets is determined by

depreciation is the GAAP depreciation method considered to be "accelerated" in nature.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 8: Operating Assets: Property, Plant, and Equipment, and Intangibles

On the balance sheet, the cumulative amount of plant and equipment already expensed is reported in an account called

What was the book value of the ship for Paulson Transport at the end of the useful life?

Interest is capitalized when incurred in connection with the construction of plant assets because

isare) a costs) that improves an operating asset and is are) added to the asset account.

Waxman Company purchased a patent for $170,000 at the beginning of 2013, and estimated that its expected useful life was 10 years.The patent has a legal life of 17 years.What amount should be recorded as amortization expense for the patent in 2013?

Fortune Company has 10 delivery trucks that became fully depreciated in the prior year.Fortune will continue charging the same amount of depreciation as before so that there will be no decrease in expenses.

Plant assets are depreciated because

Interest is capitalized on all purchased assets.

When constructing assets, capitalized interest is based on

Operating assets with no physical properties are called

Plant assets, current assets, property, plant and equipment, and fixed assets are all tangible assets.

If a company chooses to treat small plant asset expenditures as expenses, GAAP are being violated.

The income statement of Hope Market, Inc.reported a gain from the sale of land.How are the cash flow effects of this transaction reported on the statement of cash flows if the direct method is used to prepare the Operating Activities category?

Please complete the following sentences: a.Accumulated amortization is used with ______________________________________. b.Accumulated depreciation is used with ______________________________________.

Creighton, Inc.determined that it had incorrectly estimated both the useful life and the estimated residual value of equipment which it purchased 2 years ago.When accounting for the change in its accounting estimates, Creighton must

International accounting standards require companies to revalue their property, plant, and equipment to reflect fair market values.

The accounting life of intangible assets is determined by

depreciation is the GAAP depreciation method considered to be "accelerated" in nature.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Please complete the following sentences: a.Accumulated amortization is used with . b.Accumulated depreciation is used with .