Question 1

Under an operating lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 2

Impairment losses on goodwill are never reversed.

Accepted Answer

A) True 
 B)False

Question 3

A patent

Accepted Answer

A) has a legal life of 20 years. 
B) is not amortized. 
C) can be renewed indefinitely. 
D) is rarely subject to litigation because it is an exclusive right. 
A) has a legal life of 20 years. 
B) is not amortized. 
C) can be renewed indefinitely. 
D) is rarely subject to litigation because it is an exclusive right.

Question 4

When purchasing a delivery truck, the cost of painting the company logo on the side should be debited to the Vehicles account.

Accepted Answer

A) True 
 B)False

Question 5

An intangible asset must be identifiable.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements isincorrect ?

Accepted Answer

A) Under the revaluation model, the carrying amount of property, plant and equipment is adjusted to reflect its fair value. 
B) With the revaluation model, revaluation gains are recorded in Other Comprehensive Income. 
C) Companies can choose to use the cost model or the revaluation model for property, plant and equipment. 
D) Reversals of revaluation gains or write-ups are prohibited. 
A) Under the revaluation model, the carrying amount of property, plant and equipment is adjusted to reflect its fair value. 
B) With the revaluation model, revaluation gains are recorded in Other Comprehensive Income. 
C) Companies can choose to use the cost model or the revaluation model for property, plant and equipment. 
D) Reversals of revaluation gains or write-ups are prohibited.

Question 7

A loss on disposal results if the cash proceeds received from the asset sale are less than the asset's carrying amount.

Accepted Answer

A) True 
 B)False

Question 8

An asset that cannot be sold separately in the market place is

Accepted Answer

A) a patent. 
B) goodwill. 
C) a copyright. 
D) a trade name. 
A) a patent. 
B) goodwill. 
C) a copyright. 
D) a trade name.

Question 9

When an impairment loss is recorded what is the effect (if any) on Depreciation?

Accepted Answer

A) no effect 
B) credit Accumulated Depreciation 
C) debit Accumulated Depreciation 
D) credit Depreciation Expense 
A) no effect 
B) credit Accumulated Depreciation 
C) debit Accumulated Depreciation 
D) credit Depreciation Expense

Question 10

The asset turnover ratio is calculated as net sales divided by ending total assets.

Accepted Answer

A) True 
 B)False

Question 11

On January 1, 2022, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000.Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2023 would be

Accepted Answer

A) $10,000. 
B) $ 9,000. 
C) $ 6,000. 
D) $ 5,400. 
A) $10,000. 
B) $ 9,000. 
C) $ 6,000. 
D) $ 5,400.

Question 12

Which of the following is included in the cost of constructing a building?

Accepted Answer

A) cost of paving a parking lot 
B) cost of grading the land on which the building is to be constructed 
C) interest incurred during construction 
D) cost of removing the demolished building that existed on the land when it was purchased 
A) cost of paving a parking lot 
B) cost of grading the land on which the building is to be constructed 
C) interest incurred during construction 
D) cost of removing the demolished building that existed on the land when it was purchased

Question 13

Which statement is correct regarding the use of the cost model and the revaluation model?

Accepted Answer

A) The cost model is not allowed under IFRS. 
B) The revaluation model is the only model allowed under IFRS. 
C) The cost model is the only model allowed under ASPE. 
D) Either the cost model or the revaluation model can be under ASPE. 
A) The cost model is not allowed under IFRS. 
B) The revaluation model is the only model allowed under IFRS. 
C) The cost model is the only model allowed under ASPE. 
D) Either the cost model or the revaluation model can be under ASPE.

Question 14

A tangible asset must be fully depreciated before it can be removed from the books.

Accepted Answer

A) True 
 B)False

Question 15

Asset retirement costs are

Accepted Answer

A) added to the cost of a depreciable asset. 
B) treated as a separate asset. 
C) deducted from the cost of a depreciation asset. 
D) have no effect on a depreciable asset. 
A) added to the cost of a depreciable asset. 
B) treated as a separate asset. 
C) deducted from the cost of a depreciation asset. 
D) have no effect on a depreciable asset.

Question 16

Use the following information for questions 
On January 1, 2022, Anvil Corp.purchased equipment for $60,000.It was expected to last 5 years, after which it will be sold for $5,000.It is expected to be used for a total of 10,000 machine hours, and was used for 750 hours during the year ended December 31, 2022.
-The depreciation expense for 2022 using the double diminishing-balance method will be

Accepted Answer

A) $11,000. 
B) $12,250. 
C) $12,000. 
D) $24,000. 
A) $11,000. 
B) $12,250. 
C) $12,000. 
D) $24,000.

Question 17

If the return on assets is positive, an increase in total assets will result in

Accepted Answer

A) an increase in the return on assets. 
B) a decrease in the return on assets. 
C) no change in the return on assets. 
D) the effect cannot be determined. 
A) an increase in the return on assets. 
B) a decrease in the return on assets. 
C) no change in the return on assets. 
D) the effect cannot be determined.

Question 18

Land improvements are generally debited to the Land account.

Accepted Answer

A) True 
 B)False

Question 19

Equipment that cost of $180,000 has an estimated residual value of $15,000 and an estimated useful life of 4 years or 25,000 hours.Using the units-of-production method, the depreciation expense for the first year, during which the machine was used 3,300 hours, would be

Accepted Answer

A) $45,000. 
B) $41,500. 
C) $23,760. 
D) $21,780. 
A) $45,000. 
B) $41,500. 
C) $23,760. 
D) $21,780.

Question 20

A change in the estimated useful life of equipment requires

Accepted Answer

A) a retroactive change in the amount of depreciation recognized in previous years. 
B) that no change be made to depreciation calculations, so that depreciation expense amounts are comparable over the life of the asset. 
C) that the amount of depreciation expense be changed in the current and future years. 
D) that net income for the current year be increased. 
A) a retroactive change in the amount of depreciation recognized in previous years. 
B) that no change be made to depreciation calculations, so that depreciation expense amounts are comparable over the life of the asset. 
C) that the amount of depreciation expense be changed in the current and future years. 
D) that net income for the current year be increased.

Under an operating lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Impairment losses on goodwill are never reversed.

A patent

When purchasing a delivery truck, the cost of painting the company logo on the side should be debited to the Vehicles account.

An intangible asset must be identifiable.

Which of the following statements isincorrect ?

A loss on disposal results if the cash proceeds received from the asset sale are less than the asset's carrying amount.

An asset that cannot be sold separately in the market place is

When an impairment loss is recorded what is the effect (if any) on Depreciation?

The asset turnover ratio is calculated as net sales divided by ending total assets.

On January 1, 2022, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000.Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2023 would be

Which of the following is included in the cost of constructing a building?

Which statement is correct regarding the use of the cost model and the revaluation model?

A tangible asset must be fully depreciated before it can be removed from the books.

Asset retirement costs are

If the return on assets is positive, an increase in total assets will result in

Land improvements are generally debited to the Land account.

Equipment that cost of $180,000 has an estimated residual value of $15,000 and an estimated useful life of 4 years or 25,000 hours.Using the units-of-production method, the depreciation expense for the first year, during which the machine was used 3,300 hours, would be

A change in the estimated useful life of equipment requires

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 9: Reporting and Analyzing Long-Lived Assets

Under an operating lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Impairment losses on goodwill are never reversed.

A patent

When purchasing a delivery truck, the cost of painting the company logo on the side should be debited to the Vehicles account.

An intangible asset must be identifiable.

Which of the following statements isincorrect ?

A loss on disposal results if the cash proceeds received from the asset sale are less than the asset's carrying amount.

An asset that cannot be sold separately in the market place is

When an impairment loss is recorded what is the effect (if any) on Depreciation?

The asset turnover ratio is calculated as net sales divided by ending total assets.

On January 1, 2022, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000.Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2023 would be

Which of the following is included in the cost of constructing a building?

Which statement is correct regarding the use of the cost model and the revaluation model?

A tangible asset must be fully depreciated before it can be removed from the books.

Asset retirement costs are

If the return on assets is positive, an increase in total assets will result in

Land improvements are generally debited to the Land account.

Equipment that cost of $180,000 has an estimated residual value of $15,000 and an estimated useful life of 4 years or 25,000 hours.Using the units-of-production method, the depreciation expense for the first year, during which the machine was used 3,300 hours, would be

A change in the estimated useful life of equipment requires

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters