Question 1

An impairment loss is the amount by which the asset's carrying amount exceeds its recoverable amount.

Accepted Answer

A) True 
 B)False

Question 2

A gain or loss on disposal of a long-lived asset is determined by comparing the

Accepted Answer

A)  replacement cost of the asset with the asset's original cost. 
B)  carrying amount of the asset with the asset's original cost. 
C)  original cost of the asset with the proceeds received from its sale. 
D)  carrying amount of the asset with the proceeds received from its sale. 
A)  replacement cost of the asset with the asset's original cost. 
B)  carrying amount of the asset with the asset's original cost. 
C)  original cost of the asset with the proceeds received from its sale. 
D)  carrying amount of the asset with the proceeds received from its sale.

Question 3

Bay of Fundy Company uses the units-of-production method in calculating depreciation. A new piece of equipment is purchased for $18,000 that will produce an estimated 100,000 units over its useful life. Estimated residual value at the end of its useful life is $2,000. What is the depreciable cost per unit?

Accepted Answer

A)  $1.60 
B)  $1.80 
C)  $0.16 
D)  $0.18 
A)  $1.60 
B)  $1.80 
C)  $0.16 
D)  $0.18

Question 4

The method most commonly used to calculate natural resource depreciation is the

Accepted Answer

A)  straight-line method. 
B)  diminishing-balance method. 
C)  units-of-production method. 
D)  revaluation method. 
A)  straight-line method. 
B)  diminishing-balance method. 
C)  units-of-production method. 
D)  revaluation method.

Question 5

Additions and improvements are costs that are incurred to maintain the asset's operating efficiency, productive capacity, or expected useful life.

Accepted Answer

A) True 
 B)False

Question 6

The return on assets is calculated by dividing net income by total assets.

Accepted Answer

A) True 
 B)False

Question 7

Presented below is information related to long-lived assets at year end on December 31, 2014, for Jankowski Company:   Instructions
Prepare a partial balance sheet for Jankowski Company that shows how the above listed items would be presented.

Accepted Answer

The answer of Presented below is information related to long-lived...

Question 8

Goodwill CANNOT be sold individually as it is part of the business as a whole.

Accepted Answer

A) True 
 B)False

Question 9

All of the following are examples of property, plant, and equipment EXCEPT

Accepted Answer

A)  equipment. 
B)  timber stand. 
C)  land. 
D)  building. 
A)  equipment. 
B)  timber stand. 
C)  land. 
D)  building.

Question 10

IFRS allow the reversal of a previously recorded impairment loss.

Accepted Answer

A) True 
 B)False

Question 11

Tolbert Company purchased equipment on January 1, 2014 for $96,000. It is estimated that the equipment will have a $5,000 residual value at the end of its 8-year useful life. It is also estimated that the equipment will produce 100,000 units over its 8-year life.
Instructions
Answer the following independent questions.
a. Calculate the amount of depreciation expense for the year ended December 31, 2014, using the straight-line method of depreciation.
b. If 16,000 units of product are produced in 2014 and 36,000 units are produced in 2015, what is the carrying amount of the equipment at December 31, 2015 using the units-of-production depreciation method?
c. If the company uses the double diminishing-balance method of depreciation, what will be the balance of the Accumulated Depreciation-Equipment account at December 31, 2016?

Accepted Answer

The answer of Tolbert Company purchased equipment on January 1,...

Question 12

Ordinary repairs are costs to maintain the asset's operating efficiency and expected productive life.

Accepted Answer

A) True 
 B)False

Question 13

Depreciation is a process of

Accepted Answer

A)  asset devaluation. 
B)  cost accumulation. 
C)  cost allocation. 
D)  asset valuation. 
A)  asset devaluation. 
B)  cost accumulation. 
C)  cost allocation. 
D)  asset valuation.

Question 14

Development costs

Accepted Answer

A)  are always expensed when incurred. 
B)  cannot be recorded separately from research costs. 
C)  can be capitalized if it can be shown that the costs will provide future benefits. 
D)  are intangible assets that are not amortized. 
A)  are always expensed when incurred. 
B)  cannot be recorded separately from research costs. 
C)  can be capitalized if it can be shown that the costs will provide future benefits. 
D)  are intangible assets that are not amortized.

Question 15

Which of the following items should NOT be included in the cost of land?

Accepted Answer

A)  removal of old building 
B)  legal fees 
C)  clearing and draining land 
D)  structural additions to land 
A)  removal of old building 
B)  legal fees 
C)  clearing and draining land 
D)  structural additions to land

Question 16

On July 1, 2014, Yukon Minerals Co. purchased the mineral rights to a granite deposit for $700,000. It is estimated that the recoverable granite will be 400,000 tonnes. During 2014, 100,000 tonnes of granite was extracted and 60,000 tonnes were sold. The amount of the depreciation expense to be included in cost of goods sold for 2014 would be

Accepted Answer

A)  $87,500. 
B)  $52,500. 
C)  $105,000. 
D)  $175,000. 
A)  $87,500. 
B)  $52,500. 
C)  $105,000. 
D)  $175,000.

Question 17

Impairment losses on goodwill are NEVER reversed.

Accepted Answer

A) True 
 B)False

Question 18

Property, plant, and equipment are considered impaired if the carrying amount exceeds the asset's

Accepted Answer

A)  depreciation expense. 
B)  fair value. 
C)  recoverable amount. 
D)  accumulated depreciation. 
A)  depreciation expense. 
B)  fair value. 
C)  recoverable amount. 
D)  accumulated depreciation.

Question 19

All long-lived assets which are included in property, plant, and equipment must be used in the operations of the business.

Accepted Answer

A) True 
 B)False

Question 20

Under IFRS, companies have two models they can choose between to account for their property, plant, and equipment: the cost model or the amortization model.

Accepted Answer

A) True 
 B)False

An impairment loss is the amount by which the asset's carrying amount exceeds its recoverable amount.

A gain or loss on disposal of a long-lived asset is determined by comparing the

The method most commonly used to calculate natural resource depreciation is the

Additions and improvements are costs that are incurred to maintain the asset's operating efficiency, productive capacity, or expected useful life.

The return on assets is calculated by dividing net income by total assets.

Presented below is information related to long-lived assets at year end on December 31, 2014, for Jankowski Company: Instructions Prepare a partial balance sheet for Jankowski Company that shows how the above listed items would be presented.

Goodwill CANNOT be sold individually as it is part of the business as a whole.

All of the following are examples of property, plant, and equipment EXCEPT

IFRS allow the reversal of a previously recorded impairment loss.

Ordinary repairs are costs to maintain the asset's operating efficiency and expected productive life.

Depreciation is a process of

Development costs

Which of the following items should NOT be included in the cost of land?

Impairment losses on goodwill are NEVER reversed.

Property, plant, and equipment are considered impaired if the carrying amount exceeds the asset's

All long-lived assets which are included in property, plant, and equipment must be used in the operations of the business.

Under IFRS, companies have two models they can choose between to account for their property, plant, and equipment: the cost model or the amortization model.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 9: Long-Lived Assets

An impairment loss is the amount by which the asset's carrying amount exceeds its recoverable amount.

A gain or loss on disposal of a long-lived asset is determined by comparing the

The method most commonly used to calculate natural resource depreciation is the

Additions and improvements are costs that are incurred to maintain the asset's operating efficiency, productive capacity, or expected useful life.

The return on assets is calculated by dividing net income by total assets.

Presented below is information related to long-lived assets at year end on December 31, 2014, for Jankowski Company: Instructions Prepare a partial balance sheet for Jankowski Company that shows how the above listed items would be presented.

Goodwill CANNOT be sold individually as it is part of the business as a whole.

All of the following are examples of property, plant, and equipment EXCEPT

IFRS allow the reversal of a previously recorded impairment loss.

Ordinary repairs are costs to maintain the asset's operating efficiency and expected productive life.

Depreciation is a process of

Development costs

Which of the following items should NOT be included in the cost of land?

Impairment losses on goodwill are NEVER reversed.

Property, plant, and equipment are considered impaired if the carrying amount exceeds the asset's

All long-lived assets which are included in property, plant, and equipment must be used in the operations of the business.

Under IFRS, companies have two models they can choose between to account for their property, plant, and equipment: the cost model or the amortization model.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters