Question 1

Land is not a depreciable asset, but the amount allocated to the building is subject to .

Accepted Answer

The answer of Land is not a depreciable asset, but...

Question 2

Depreciation is a process by which

Accepted Answer

A) replacement funds are accumulated for plant and equipment. 
B) the decline in market value of plant and equipment is determined and recorded. 
C) the cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset. 
D) the difference between current market value and historical cost of plant and equipment. 
A) replacement funds are accumulated for plant and equipment. 
B) the decline in market value of plant and equipment is determined and recorded. 
C) the cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset. 
D) the difference between current market value and historical cost of plant and equipment.

Question 3

Acquisition costs are also known as replacement costs.

Accepted Answer

A) True 
 B)False

Question 4

Acquisition cost is also referred to as: .

Accepted Answer

The answer of Acquisition cost is also referred to as:...

Question 5

A change in estimate should be recorded .

Accepted Answer

prospectively
For each of the

Question 6

Assets classified as property, plant, and equipment are reported at

Accepted Answer

A) each asset's estimated market value at the balance sheet date. 
B) each asset's estimated salvage value at the balance sheet date. 
C) the estimated depreciable cost at the balance sheet date. 
D) each asset's original cost less depreciation since acquisition. 
A) each asset's estimated market value at the balance sheet date. 
B) each asset's estimated salvage value at the balance sheet date. 
C) the estimated depreciable cost at the balance sheet date. 
D) each asset's original cost less depreciation since acquisition.

Question 7

Fall Corp.uses plant assets that are subject to rapid decreases in value due to obsolescence and physical deterioration.Which of the following depreciation methods is most appropriate to measure the decline in the usefulness of the company's assets?

Accepted Answer

A) Double-declining-balance 
B) Revenue expenditure method 
C) Straight-line 
D) Units-of-production 
A) Double-declining-balance 
B) Revenue expenditure method 
C) Straight-line 
D) Units-of-production

Question 8

is are) the expenditures) incurred in the discovery of new knowledge and the translation of research into a design or plan for a new product.

Accepted Answer

Research a

Question 9

All of the following statements are true except:

Accepted Answer

A) International accounting standards are more flexible in allowing the use of fair market values for intangible assets. 
B) FASB standards require all research and development costs to be expensed. 
C) IFRS requires all research and development costs to be expensed. 
D) Under IFRS, fair market values for intangibles require an active market. 
A) International accounting standards are more flexible in allowing the use of fair market values for intangible assets. 
B) FASB standards require all research and development costs to be expensed. 
C) IFRS requires all research and development costs to be expensed. 
D) Under IFRS, fair market values for intangibles require an active market.

Question 10

A building with an appraisal value of $167,000 is made available at an offer price of $162,000.The purchaser acquires the property for $25,000 in cash, a 90-day note payable for $75,000, and a mortgage amounting to $65,000.The cost basis recorded in the buyer's accounting records to recognize this purchase is

Accepted Answer

A) $167,000 
B) $162,000 
C) $165,000 
D) $140,000 
A) $167,000 
B) $162,000 
C) $165,000 
D) $140,000

Question 11

Depreciation does not describe the increase or decrease in the market value of the asset.

Accepted Answer

A) True 
 B)False

Question 12

Borden Company incurred the following costs to acquire and prepare land for a new parking lot: purchase price for land, cost to clear the land, cost of paving, lighting for the parking lot, and landscaping for the parking lot.How should the company determine which costs should be recorded as Land Improvements and which cost should be recorded as Land?

Accepted Answer

A) The costs with an unlimited life will increase Land, and the costs with a limited useful life will increase Land Improvements. 
B) The costs with a limited life will increase Land, and the costs with an unlimited useful life will increase Land Improvements. 
C) The costs to be depreciated will increase Land, and the costs that will not be depreciated will increase Land Improvements 
D) Costs that are depreciable will increase Land Improvements, while other costs are expensed immediately because of a lack of definite life. 
A) The costs with an unlimited life will increase Land, and the costs with a limited useful life will increase Land Improvements. 
B) The costs with a limited life will increase Land, and the costs with an unlimited useful life will increase Land Improvements. 
C) The costs to be depreciated will increase Land, and the costs that will not be depreciated will increase Land Improvements 
D) Costs that are depreciable will increase Land Improvements, while other costs are expensed immediately because of a lack of definite life.

Question 13

At the end of 2013, Clock Products, Inc.determined that one of its patents was worthless.The patent had a cost of $300,000.The patent had been amortized for 5 years of its estimated 15-year legal life.Which of the following statements is correct?

Accepted Answer

A) Clock Products must continue to amortize the patent over its remaining 10 years of life. 
B) The patent must be reduced to 5/15, or 33.3% of its original cost and amortized over the remaining 10 years. 
C) The remaining unamortized cost must be removed from the accounting records and treated as a loss on the income statement. 
D) Clock Products must correct its financial statements for the past five years, so that the entire cost is allocated to that five-year period. 
A) Clock Products must continue to amortize the patent over its remaining 10 years of life. 
B) The patent must be reduced to 5/15, or 33.3% of its original cost and amortized over the remaining 10 years. 
C) The remaining unamortized cost must be removed from the accounting records and treated as a loss on the income statement. 
D) Clock Products must correct its financial statements for the past five years, so that the entire cost is allocated to that five-year period.

Question 14

Depreciation is

Accepted Answer

A) an effort to achieve proper matching of the cost of operating assets. 
B) an accumulation of funds to replace the related plant asset. 
C) the difference between the original cost and salvage value of an asset. 
D) the cash allocated each period to maintain a plant asset. 
A) an effort to achieve proper matching of the cost of operating assets. 
B) an accumulation of funds to replace the related plant asset. 
C) the difference between the original cost and salvage value of an asset. 
D) the cash allocated each period to maintain a plant asset.

Question 15

Bing's Export Co.
Bing's Export Co.purchased a new delivery truck at the beginning of 2015.The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000.A full year's depreciation expense is to be recorded in 2015.The truck was driven 20,000 miles during 2015 and 24,000 miles during 2016.The number of expected miles over five years is 100,000.
-Refer to information for Bing's Export Co.
What is the amount by which double-declining-balance depreciation exceeds straight-line depreciation over the 5-year life of the truck?

Accepted Answer

A) $ -0- 
B) $ 7,000 
C) $37,000 
D) $ 6,000 
A) $ -0- 
B) $ 7,000 
C) $37,000 
D) $ 6,000

Question 16

Farley River Inc.
Use the information presented below for Farley River, Inc.for 2015 and 2014 to answer the questions that follow.Farley River uses the straight-line depreciation method.  
-Refer to the information for Farley River Inc.
Using the 2015 data, what is the average age of Farley River's property, plant, and equipment?

Accepted Answer

A) 1.60 years 
B) 2.50 years 
C) 4.00 years 
D) 10.00 years 
A) 1.60 years 
B) 2.50 years 
C) 4.00 years 
D) 10.00 years

Question 17

All operating assets, except land, are subject to depreciation, amortization, or depletion.

Accepted Answer

A) True 
 B)False

Question 18

A gain is recognized on the disposal of plant assets when:

Accepted Answer

A) The sales price is greater than the book value and less than the residual value. 
B) The sales price is greater than the book value and greater than the residual value. 
C) The sales price is less than both the book value and the residual value. 
D) The sales price is greater than the residual value but less than the book value. 
A) The sales price is greater than the book value and less than the residual value. 
B) The sales price is greater than the book value and greater than the residual value. 
C) The sales price is less than both the book value and the residual value. 
D) The sales price is greater than the residual value but less than the book value.

Question 19

The FASB standards do not have a specific rule that requires residual value and asset life to be reviewed annually for property, plant, and equipment.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following items is added to net income to determine cash flows from operating activities when the indirect method is used to prepare the Operating Activities category of the statement of cash flows?

Accepted Answer

A) Accumulated depreciation 
B) Cash from note payable related to truck acquired 
C) Cost of plant assets acquired during the year 
D) Depreciation expense 
A) Accumulated depreciation 
B) Cash from note payable related to truck acquired 
C) Cost of plant assets acquired during the year 
D) Depreciation expense

Land is not a depreciable asset, but the amount allocated to the building is subject to .

Depreciation is a process by which

Acquisition costs are also known as replacement costs.

Acquisition cost is also referred to as: .

A change in estimate should be recorded .

Assets classified as property, plant, and equipment are reported at

Fall Corp.uses plant assets that are subject to rapid decreases in value due to obsolescence and physical deterioration.Which of the following depreciation methods is most appropriate to measure the decline in the usefulness of the company's assets?

is are) the expenditures) incurred in the discovery of new knowledge and the translation of research into a design or plan for a new product.

All of the following statements are true except:

Depreciation does not describe the increase or decrease in the market value of the asset.

At the end of 2013, Clock Products, Inc.determined that one of its patents was worthless.The patent had a cost of $300,000.The patent had been amortized for 5 years of its estimated 15-year legal life.Which of the following statements is correct?

Depreciation is

All operating assets, except land, are subject to depreciation, amortization, or depletion.

A gain is recognized on the disposal of plant assets when:

The FASB standards do not have a specific rule that requires residual value and asset life to be reviewed annually for property, plant, and equipment.

Which of the following items is added to net income to determine cash flows from operating activities when the indirect method is used to prepare the Operating Activities category of the statement of cash flows?

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

Land is not a depreciable asset, but the amount allocated to the building is subject to .

Depreciation is a process by which

Acquisition costs are also known as replacement costs.

Acquisition cost is also referred to as: .

A change in estimate should be recorded .

Assets classified as property, plant, and equipment are reported at

Fall Corp.uses plant assets that are subject to rapid decreases in value due to obsolescence and physical deterioration.Which of the following depreciation methods is most appropriate to measure the decline in the usefulness of the company's assets?

is are) the expenditures) incurred in the discovery of new knowledge and the translation of research into a design or plan for a new product.

All of the following statements are true except:

Depreciation does not describe the increase or decrease in the market value of the asset.

At the end of 2013, Clock Products, Inc.determined that one of its patents was worthless.The patent had a cost of $300,000.The patent had been amortized for 5 years of its estimated 15-year legal life.Which of the following statements is correct?

Depreciation is

All operating assets, except land, are subject to depreciation, amortization, or depletion.

A gain is recognized on the disposal of plant assets when:

The FASB standards do not have a specific rule that requires residual value and asset life to be reviewed annually for property, plant, and equipment.

Which of the following items is added to net income to determine cash flows from operating activities when the indirect method is used to prepare the Operating Activities category of the statement of cash flows?

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