Question 1

The cost of furniture and fixtures, such as file cabinets or shelving, includes its basic cost plus all other costs to ready the asset for its intended use.

Accepted Answer

A) True 
 B)False

Question 2

A piece of equipment that was originally purchased for $25,000, had accumulated depreciation of $18,000, and was sold for $8,000, would recognize a gain of $1,000.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following accounts would be credited in a journal entry for an asset exchange involving vehicles?

Accepted Answer

A) Accumulated Depreciation-Old Vehicle 
B) Vehicle (Old) 
C) Loss on Exchange of Assets 
D) Vehicle (New) 
A) Accumulated Depreciation-Old Vehicle 
B) Vehicle (Old) 
C) Loss on Exchange of Assets 
D) Vehicle (New)

Question 4

Long-term marketable securities, such as five-year held-to-maturity securities, would be listed last in the long-term assets portion of a company's Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 5

The depreciation method often used for income tax purposes is the:

Accepted Answer

A) expense method. 
B) units-of-production method. 
C) double-declining balance method. 
D) straight-line method. 
A) expense method. 
B) units-of-production method. 
C) double-declining balance method. 
D) straight-line method.

Question 6

Costs that should be charged to the land account include:

Accepted Answer

A) the cost of removing unwanted buildings. 
B) paving the parking lot. 
C) installing fences. 
D) the cost of a sign. 
A) the cost of removing unwanted buildings. 
B) paving the parking lot. 
C) installing fences. 
D) the cost of a sign.

Question 7

Aspen Ore purchased a vein of coal ore for $5,300,000. It is estimated that 32,000,000 tons of ore are available to be extracted. The estimated depletion expense for this year's extraction of 2,790,000 tons of ore is: (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Accepted Answer

A) $502,200. 
B) $5,300,000. 
C) $474,300. 
D) $415,686. 
A) $502,200. 
B) $5,300,000. 
C) $474,300. 
D) $415,686.

Question 8

Which of the following would NOT be a part of land improvements?

Accepted Answer

A) Paving of the parking lot 
B) Installing fences around the property 
C) Putting in sidewalks 
D) Grading and leveling the land 
A) Paving of the parking lot 
B) Installing fences around the property 
C) Putting in sidewalks 
D) Grading and leveling the land

Question 9

The first step in recording a disposal transaction is to figure the gain or loss on the disposal.

Accepted Answer

A) True 
 B)False

Question 10

Disposal of a plant asset always occurs after the asset has been fully depreciated.

Accepted Answer

A) True 
 B)False

Question 11

The process of allocating the cost of natural resources to an expense is called depletion.

Accepted Answer

A) True 
 B)False

Question 12

Equipment costing $123,000 has accumulated depreciation of $95,000. The equipment is a trade-in for new equipment costing $188,000. If the trade-in value received for the old equipment is $34,000, the journal entry to record this transaction is to:

Accepted Answer

A) debit Equipment (New)for $188,000, debit Accumulated Depreciation - Equipment for $95,000, credit Equipment (Old)for $123,000 and credit Cash for $160,000. 
B) debit Equipment (New)for $188,000, debit Accumulated Depreciation - Equipment for $95,000, credit Equipment (Old)for $123,000, credit Cash for $154,000, and credit Gain on Exchange of Assets for $6,000. 
C) debit Equipment (New)for $188,000, debit Accumulated Depreciation - Equipment for $95,000, debit Loss on Exchange of Assets for $28,000, credit Equipment (Old)for $123,000 and credit Cash for $188,000. 
D) debit Equipment (New)for $188,000, and credit Cash for $188,000. 
A) debit Equipment (New)for $188,000, debit Accumulated Depreciation - Equipment for $95,000, credit Equipment (Old)for $123,000 and credit Cash for $160,000. 
B) debit Equipment (New)for $188,000, debit Accumulated Depreciation - Equipment for $95,000, credit Equipment (Old)for $123,000, credit Cash for $154,000, and credit Gain on Exchange of Assets for $6,000. 
C) debit Equipment (New)for $188,000, debit Accumulated Depreciation - Equipment for $95,000, debit Loss on Exchange of Assets for $28,000, credit Equipment (Old)for $123,000 and credit Cash for $188,000. 
D) debit Equipment (New)for $188,000, and credit Cash for $188,000.

Question 13

The costs associated with clearing land and removing buildings are considered land improvements.

Accepted Answer

A) True 
 B)False

Question 14

When an asset is disposed of, the current period's depreciation expense account must be updated to the time of the disposal.

Accepted Answer

A) True 
 B)False

Question 15

Classy Cooks did a major overhaul of their ovens, which extended the useful life of the ovens by 4 years. The journal entry to record this included a debit to repairs expense. This entry is:

Accepted Answer

A) incorrect, and as a result assets will be overstated. 
B) correct, as this is an example of an ordinary repair. 
C) incorrect, and as a result net income will be understated. 
D) correct, as this is an example of a betterment. 
A) incorrect, and as a result assets will be overstated. 
B) correct, as this is an example of an ordinary repair. 
C) incorrect, and as a result net income will be understated. 
D) correct, as this is an example of a betterment.

Question 16

Investments in debt securities, may be classified as either current or long-term assets based on their maturity date.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following would be considered a natural resource?

Accepted Answer

A) Corn 
B) Livestock 
C) Timber 
D) Wheat 
A) Corn 
B) Livestock 
C) Timber 
D) Wheat

Question 18

Which of the following would NOT be considered part of the cost of the land?

Accepted Answer

A) Survey and legal fees 
B) Realtor commissions 
C) Paving 
D) Unpaid property taxes on the land 
A) Survey and legal fees 
B) Realtor commissions 
C) Paving 
D) Unpaid property taxes on the land

Question 19

Minerals, timer and coal are:

Accepted Answer

A) amortized. 
B) depleted. 
C) depreciated. 
D) expensed. 
A) amortized. 
B) depleted. 
C) depreciated. 
D) expensed.

Question 20

McDonald's "golden arches" are an example of a(n)_______, which would be classified as a(n)_______.

Accepted Answer

A) patent; intangible asset 
B) trademark; plant asset 
C) trademark; intangible asset 
D) patent; plant asset 
A) patent; intangible asset 
B) trademark; plant asset 
C) trademark; intangible asset 
D) patent; plant asset

The cost of furniture and fixtures, such as file cabinets or shelving, includes its basic cost plus all other costs to ready the asset for its intended use.

A piece of equipment that was originally purchased for $25,000, had accumulated depreciation of $18,000, and was sold for $8,000, would recognize a gain of $1,000.

Which of the following accounts would be credited in a journal entry for an asset exchange involving vehicles?

Long-term marketable securities, such as five-year held-to-maturity securities, would be listed last in the long-term assets portion of a company's Balance Sheet.

The depreciation method often used for income tax purposes is the:

Costs that should be charged to the land account include:

Which of the following would NOT be a part of land improvements?

The first step in recording a disposal transaction is to figure the gain or loss on the disposal.

Disposal of a plant asset always occurs after the asset has been fully depreciated.

The process of allocating the cost of natural resources to an expense is called depletion.

Equipment costing $123,000 has accumulated depreciation of $95,000. The equipment is a trade-in for new equipment costing $188,000. If the trade-in value received for the old equipment is $34,000, the journal entry to record this transaction is to:

The costs associated with clearing land and removing buildings are considered land improvements.

When an asset is disposed of, the current period's depreciation expense account must be updated to the time of the disposal.

Classy Cooks did a major overhaul of their ovens, which extended the useful life of the ovens by 4 years. The journal entry to record this included a debit to repairs expense. This entry is:

Investments in debt securities, may be classified as either current or long-term assets based on their maturity date.

Which of the following would be considered a natural resource?

Which of the following would NOT be considered part of the cost of the land?

Minerals, timer and coal are:

McDonald's "golden arches" are an example of a(n)_, which would be classified as a(n)_.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 8: Long-Term and Other Assets

The cost of furniture and fixtures, such as file cabinets or shelving, includes its basic cost plus all other costs to ready the asset for its intended use.

A piece of equipment that was originally purchased for $25,000, had accumulated depreciation of $18,000, and was sold for $8,000, would recognize a gain of $1,000.

Which of the following accounts would be credited in a journal entry for an asset exchange involving vehicles?

Long-term marketable securities, such as five-year held-to-maturity securities, would be listed last in the long-term assets portion of a company's Balance Sheet.

The depreciation method often used for income tax purposes is the:

Costs that should be charged to the land account include:

Which of the following would NOT be a part of land improvements?

The first step in recording a disposal transaction is to figure the gain or loss on the disposal.

Disposal of a plant asset always occurs after the asset has been fully depreciated.

The process of allocating the cost of natural resources to an expense is called depletion.

Equipment costing $123,000 has accumulated depreciation of $95,000. The equipment is a trade-in for new equipment costing $188,000. If the trade-in value received for the old equipment is $34,000, the journal entry to record this transaction is to:

The costs associated with clearing land and removing buildings are considered land improvements.

When an asset is disposed of, the current period's depreciation expense account must be updated to the time of the disposal.

Classy Cooks did a major overhaul of their ovens, which extended the useful life of the ovens by 4 years. The journal entry to record this included a debit to repairs expense. This entry is:

Investments in debt securities, may be classified as either current or long-term assets based on their maturity date.

Which of the following would be considered a natural resource?

Which of the following would NOT be considered part of the cost of the land?

Minerals, timer and coal are:

McDonald's "golden arches" are an example of a(n)_______, which would be classified as a(n)_______.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters

McDonald's "golden arches" are an example of a(n)_, which would be classified as a(n)_.