Question 1

Capital expenditures are also called balance sheet expenditures.

Accepted Answer

A) True 
 B)False

Question 2

Inadequacy refers to:

Accepted Answer

A)  An asset that is no longer useful. 
B)  An asset that is worn out. 
C)  The same as obsolescence. 
D)  The condition where the capacity of a property, plant and equipment asset is too small to meet the company's productive demands. 
E)  All of these answers are correct. 
A)  An asset that is no longer useful. 
B)  An asset that is worn out. 
C)  The same as obsolescence. 
D)  The condition where the capacity of a property, plant and equipment asset is too small to meet the company's productive demands. 
E)  All of these answers are correct.

Question 3

Depreciation is the process of allocating the cost of a tangible asset in a rational and systematic manner over the asset's estimated useful life.

Accepted Answer

A) True 
 B)False

Question 4

Revenue expenditures are expenditures to keep assets in normal operating condition.

Accepted Answer

A) True 
 B)False

Question 5

Treating low-cost asset purchases as expenses is allowed by which principle?

Accepted Answer

A)  Matching. 
B)  Cost. 
C)  Materiality. 
D)  Timeliness. 
E)  Prudence. 
A)  Matching. 
B)  Cost. 
C)  Materiality. 
D)  Timeliness. 
E)  Prudence.

Question 6

Property, plant and equipment include:

Accepted Answer

A)  Buildings. 
B)  Machinery and equipment. 
C)  Land. 
D)  Land improvements. 
E)  All of these answers are correct. 
A)  Buildings. 
B)  Machinery and equipment. 
C)  Land. 
D)  Land improvements. 
E)  All of these answers are correct.

Question 7

Property, plant and equipment are assets held for sale.

Accepted Answer

A) True 
 B)False

Question 8

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each accounting period during its useful life is called:

Accepted Answer

A)  Double-declining-balance depreciation. 
B)  Capital cost allowance. 
C)  Straight-line depreciation. 
D)  Units-of-production depreciation. 
E)  Accelerated depreciation. 
A)  Double-declining-balance depreciation. 
B)  Capital cost allowance. 
C)  Straight-line depreciation. 
D)  Units-of-production depreciation. 
E)  Accelerated depreciation.

Question 9

SportsWorld purchased equipment costing $10,000. The equipment has a residual value of $1,000, and an estimated useful life of 5 years or 36,000 shoes. Actual unitsproduced during the year were 7,000 units. Calculate annual depreciation using the straight line method.

Accepted Answer

A)  $2,000. 
B)  $1,800. 
C)  $1,750. 
D)  $4,000. 
E)  $1,450. 
A)  $2,000. 
B)  $1,800. 
C)  $1,750. 
D)  $4,000. 
E)  $1,450.

Question 10

The Income Tax Act requires that companies use a declining-balance method forcalculating the maximum capital cost allowance that may be claimed in any period.

Accepted Answer

A) True 
 B)False

Question 11

The cost of an asset plus its accumulated depreciation equals the asset's book value.

Accepted Answer

A) True 
 B)False

Question 12

Depreciation is usually recorded:

Accepted Answer

A)  From the actual date of purchase. 
B)  From the beginning of the accounting year in which an asset is purchased. 
C)  From the end of the month nearest the actual purchase date. 
D)  From the first of the month nearest the actual purchase date. 
E)  By any of the above methods. 
A)  From the actual date of purchase. 
B)  From the beginning of the accounting year in which an asset is purchased. 
C)  From the end of the month nearest the actual purchase date. 
D)  From the first of the month nearest the actual purchase date. 
E)  By any of the above methods.

Question 13

Natural resources:

Accepted Answer

A)  Include trees, mineral deposits, and oil and gas fields. 
B)  Can be amortized. 
C)  Are consumed when used. 
D)  Are long-term assets. 
E)  All of these answers are correct. 
A)  Include trees, mineral deposits, and oil and gas fields. 
B)  Can be amortized. 
C)  Are consumed when used. 
D)  Are long-term assets. 
E)  All of these answers are correct.

Question 14

When assigning values to an exchange of assets you should use the fair value of the asset given up.

Accepted Answer

A) True 
 B)False

Question 15

Legal permissions for the extraction of oil and gas from the earth are known as:

Accepted Answer

A)  Drilling rights. 
B)  Trademarks. 
C)  Copyrights. 
D)  Leaseholds. 
E)  Patents. 
A)  Drilling rights. 
B)  Trademarks. 
C)  Copyrights. 
D)  Leaseholds. 
E)  Patents.

Question 16

SportsWorld uses straight-line depreciation for a piece of equipment that cost $12,000, had a salvage value of $2,000, and a five-year service life. At the end of the first year, an impairment loss of $2,000 was recognized on the asset. Calculate the amount ofdepreciation expense for each of the remaining years of the asset's useful life.

Accepted Answer

A)  $1,800. 
B)  $2,000. 
C)  $1,500. 
D)  $2,500. 
E)  $1,600. 
A)  $1,800. 
B)  $2,000. 
C)  $1,500. 
D)  $2,500. 
E)  $1,600.

Question 17

Non-current assets are any liabilities that are used in the operations of a business.

Accepted Answer

A) True 
 B)False

Question 18

The most frequently used method of depreciation is the straight-line method.

Accepted Answer

A) True 
 B)False

Question 19

Depreciation measures the decline in market value of an asset.

Accepted Answer

A) True 
 B)False

Question 20

A depreciable asset that is purchased on March 18 would be depreciated for ninemonths of the first year, if the fiscal year ends on December 31 using nearest whole month method.

Accepted Answer

A) True 
 B)False

Capital expenditures are also called balance sheet expenditures.

Inadequacy refers to:

Depreciation is the process of allocating the cost of a tangible asset in a rational and systematic manner over the asset's estimated useful life.

Revenue expenditures are expenditures to keep assets in normal operating condition.

Treating low-cost asset purchases as expenses is allowed by which principle?

Property, plant and equipment include:

Property, plant and equipment are assets held for sale.

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each accounting period during its useful life is called:

SportsWorld purchased equipment costing $10,000. The equipment has a residual value of $1,000, and an estimated useful life of 5 years or 36,000 shoes. Actual unitsproduced during the year were 7,000 units. Calculate annual depreciation using the straight line method.

The Income Tax Act requires that companies use a declining-balance method forcalculating the maximum capital cost allowance that may be claimed in any period.

The cost of an asset plus its accumulated depreciation equals the asset's book value.

Depreciation is usually recorded:

Natural resources:

When assigning values to an exchange of assets you should use the fair value of the asset given up.

Legal permissions for the extraction of oil and gas from the earth are known as:

Non-current assets are any liabilities that are used in the operations of a business.

The most frequently used method of depreciation is the straight-line method.

Depreciation measures the decline in market value of an asset.

A depreciable asset that is purchased on March 18 would be depreciated for ninemonths of the first year, if the fiscal year ends on December 31 using nearest whole month method.

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

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Exam 9: Property, Plant and Equipment and Intangibles

Capital expenditures are also called balance sheet expenditures.

Inadequacy refers to:

Depreciation is the process of allocating the cost of a tangible asset in a rational and systematic manner over the asset's estimated useful life.

Revenue expenditures are expenditures to keep assets in normal operating condition.

Treating low-cost asset purchases as expenses is allowed by which principle?

Property, plant and equipment include:

Property, plant and equipment are assets held for sale.

A method that allocates an equal portion of the total depreciation for a property, plant and equipment asset to each accounting period during its useful life is called:

SportsWorld purchased equipment costing $10,000. The equipment has a residual value of $1,000, and an estimated useful life of 5 years or 36,000 shoes. Actual unitsproduced during the year were 7,000 units. Calculate annual depreciation using the straight line method.

The Income Tax Act requires that companies use a declining-balance method forcalculating the maximum capital cost allowance that may be claimed in any period.

The cost of an asset plus its accumulated depreciation equals the asset's book value.

Depreciation is usually recorded:

Natural resources:

When assigning values to an exchange of assets you should use the fair value of the asset given up.

Legal permissions for the extraction of oil and gas from the earth are known as:

Non-current assets are any liabilities that are used in the operations of a business.

The most frequently used method of depreciation is the straight-line method.

Depreciation measures the decline in market value of an asset.

A depreciable asset that is purchased on March 18 would be depreciated for ninemonths of the first year, if the fiscal year ends on December 31 using nearest whole month method.

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters