Question 1

Revenue expenditures are additional costs of property, plant and equipment that provide material benefits extending beyond the current period.

Accepted Answer

A) True 
 B)False

Question 2

Property, plant and equipment are:

Accepted Answer

A)  Used in business operations. 
B)  Long-term investments. 
C)  Natural resources. 
D)  Current assets. 
E)  Never depreciated. 
A)  Used in business operations. 
B)  Long-term investments. 
C)  Natural resources. 
D)  Current assets. 
E)  Never depreciated.

Question 3

Goodwill is depreciated over its useful life as estimated by the business's management.

Accepted Answer

A) True 
 B)False

Question 4

At the time a plant asset is being discarded or sold, it is necessary to update the accumulated depreciation of the plant asset to the date of disposal.

Accepted Answer

A) True 
 B)False

Question 5

On the balance sheet, it is not necessary to report both the cost and the accumulated depreciation of an asset.

Accepted Answer

A) True 
 B)False

Question 6

Intangible assets provide rights, privileges, and competitive advantages to the owner, are used in operations, and have no physical substance.

Accepted Answer

A) True 
 B)False

Question 7

When the cost of the asset changes because of a subsequent capital expenditure, revised depreciation for current and future periods must be calculated and adjusted.

Accepted Answer

A) True 
 B)False

Question 8

The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use.

Accepted Answer

A) True 
 B)False

Question 9

On January 1 of this year, SportsWorld purchased a new cash register for $5,400. This register has a useful life of 10 years and a residual value of $400. Using thedouble-declining-balance method, how much depreciation expense should SportsWorld recognize for next year?

Accepted Answer

A)  $1,000. 
B)  $1,080. 
C)  $864. 
D)  $540. 
E)  $500. 
A)  $1,000. 
B)  $1,080. 
C)  $864. 
D)  $540. 
E)  $500.

Question 10

Depreciation:

Accepted Answer

A)  Is a cause of obsolescence. 
B)  Measures physical deterioration of an asset. 
C)  Measures the decline in market value of an asset. 
D)  Is the process of allocating to expense the cost of property, plant and equipment. 
E)  All of these answers are correct. 
A)  Is a cause of obsolescence. 
B)  Measures physical deterioration of an asset. 
C)  Measures the decline in market value of an asset. 
D)  Is the process of allocating to expense the cost of property, plant and equipment. 
E)  All of these answers are correct.

Question 11

The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

Accepted Answer

A) True 
 B)False

Question 12

Because depreciation is based on predictions of residual value and useful life, depreciation is an estimate.

Accepted Answer

A) True 
 B)False

Question 13

A copyright:

Accepted Answer

A)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 50 years. 
B)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 20 years. 
C)  Is an exclusive right granted to its owner to manufacture and sell a machine or device, or to use a process, for 50 years. 
D)  The amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E)  Is an exclusive right granted to its owner to manufacture and sell a machine or device, or to use a process, for 20 years. 
A)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 50 years. 
B)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 20 years. 
C)  Is an exclusive right granted to its owner to manufacture and sell a machine or device, or to use a process, for 50 years. 
D)  The amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E)  Is an exclusive right granted to its owner to manufacture and sell a machine or device, or to use a process, for 20 years.

Question 14

JoyCo acquired equipment on April 1, 2017, at a cost of $90,000 and with an estimated useful life of 10 years. The machine has a residual value of $10,000. JoyCo uses thedouble-declining-balance method of depreciation. How much depreciation should be recorded by JoyCo for the year ended December 31, 2017?

Accepted Answer

A)  $9,000 
B)  $10,000 
C)  $13,500 
D)  $8,000 
E)  $12,000 
A)  $9,000 
B)  $10,000 
C)  $13,500 
D)  $8,000 
E)  $12,000

Question 15

A company is required to purchase all assets at the beginning of an accounting period so that a full year's worth of depreciation can be taken.

Accepted Answer

A) True 
 B)False

Question 16

An asset can be disposed of by:

Accepted Answer

A)  Donating it to charity. 
B)  Selling. 
C)  Exchanging. 
D)  Discarding. 
E)  All of these answers are correct. 
A)  Donating it to charity. 
B)  Selling. 
C)  Exchanging. 
D)  Discarding. 
E)  All of these answers are correct.

Question 17

Financial accounting and tax accounting require the same recordkeeping; therefore, there should be no difference in results between the two accounting systems.

Accepted Answer

A) True 
 B)False

Question 18

Capital cost allowance:

Accepted Answer

A)  Is not required for tax reporting. 
B)  Is not used in Canada. 
C)  Is acceptable for financial reporting. 
D)  Is the income tax act equivalent of depreciation. 
E)  All of these answers are correct. 
A)  Is not required for tax reporting. 
B)  Is not used in Canada. 
C)  Is acceptable for financial reporting. 
D)  Is the income tax act equivalent of depreciation. 
E)  All of these answers are correct.

Question 19

Creek Construction owned a bulldozer which was destroyed by fire. The bulldozeroriginally cost $38,000. The accumulated depreciation recorded to the date of loss was$20,000. The proceeds from the insurance company were $20,000. Creek Construction should recognize:

Accepted Answer

A)  A loss of $38,000. 
B)  A gain of $2,000. 
C)  An expense of $2,000. 
D)  A loss of $2,000. 
E)  A gain of $20,000. 
A)  A loss of $38,000. 
B)  A gain of $2,000. 
C)  An expense of $2,000. 
D)  A loss of $2,000. 
E)  A gain of $20,000.

Question 20

A depreciation method that produces larger depreciation charges during the early years of an asset's life and smaller charges in the later years is:

Accepted Answer

A)  Accelerated depreciation. 
B)  Book value depreciation. 
C)  Capital cost allowance. 
D)  Units-of-production depreciation. 
E)  Straight-line depreciation. 
A)  Accelerated depreciation. 
B)  Book value depreciation. 
C)  Capital cost allowance. 
D)  Units-of-production depreciation. 
E)  Straight-line depreciation.

Revenue expenditures are additional costs of property, plant and equipment that provide material benefits extending beyond the current period.

Property, plant and equipment are:

Goodwill is depreciated over its useful life as estimated by the business's management.

At the time a plant asset is being discarded or sold, it is necessary to update the accumulated depreciation of the plant asset to the date of disposal.

On the balance sheet, it is not necessary to report both the cost and the accumulated depreciation of an asset.

Intangible assets provide rights, privileges, and competitive advantages to the owner, are used in operations, and have no physical substance.

When the cost of the asset changes because of a subsequent capital expenditure, revised depreciation for current and future periods must be calculated and adjusted.

The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use.

On January 1 of this year, SportsWorld purchased a new cash register for $5,400. This register has a useful life of 10 years and a residual value of $400. Using thedouble-declining-balance method, how much depreciation expense should SportsWorld recognize for next year?

Depreciation:

The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

Because depreciation is based on predictions of residual value and useful life, depreciation is an estimate.

A copyright:

A company is required to purchase all assets at the beginning of an accounting period so that a full year's worth of depreciation can be taken.

An asset can be disposed of by:

Financial accounting and tax accounting require the same recordkeeping; therefore, there should be no difference in results between the two accounting systems.

Capital cost allowance:

Creek Construction owned a bulldozer which was destroyed by fire. The bulldozeroriginally cost $38,000. The accumulated depreciation recorded to the date of loss was$20,000. The proceeds from the insurance company were $20,000. Creek Construction should recognize:

A depreciation method that produces larger depreciation charges during the early years of an asset's life and smaller charges in the later years is:

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

Revenue expenditures are additional costs of property, plant and equipment that provide material benefits extending beyond the current period.

Property, plant and equipment are:

Goodwill is depreciated over its useful life as estimated by the business's management.

At the time a plant asset is being discarded or sold, it is necessary to update the accumulated depreciation of the plant asset to the date of disposal.

On the balance sheet, it is not necessary to report both the cost and the accumulated depreciation of an asset.

Intangible assets provide rights, privileges, and competitive advantages to the owner, are used in operations, and have no physical substance.

When the cost of the asset changes because of a subsequent capital expenditure, revised depreciation for current and future periods must be calculated and adjusted.

The cost of an asset includes all normal and reasonable expenditures necessary to get it in place and ready for its intended use.

On January 1 of this year, SportsWorld purchased a new cash register for $5,400. This register has a useful life of 10 years and a residual value of $400. Using thedouble-declining-balance method, how much depreciation expense should SportsWorld recognize for next year?

Depreciation:

The cost principle requires that an asset be recorded at the cash or cash equivalent amount given in exchange.

Because depreciation is based on predictions of residual value and useful life, depreciation is an estimate.

A copyright:

A company is required to purchase all assets at the beginning of an accounting period so that a full year's worth of depreciation can be taken.

An asset can be disposed of by:

Financial accounting and tax accounting require the same recordkeeping; therefore, there should be no difference in results between the two accounting systems.

Capital cost allowance:

Creek Construction owned a bulldozer which was destroyed by fire. The bulldozeroriginally cost $38,000. The accumulated depreciation recorded to the date of loss was$20,000. The proceeds from the insurance company were $20,000. Creek Construction should recognize:

A depreciation method that produces larger depreciation charges during the early years of an asset's life and smaller charges in the later years is:

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