Question 1

An example of an other asset would be a trademark.

Accepted Answer

A) True 
 B)False

Question 2

Lionworks Corporation made a basket purchase of three items. Item X was appraised at $30,000; item Y was appraised at $55,000; and item Z was appraised at $65,000. The purchase price was $125,000. The amount at which item X should be recorded (rounded to the nearest dollar)is: (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Accepted Answer

A) $36,000. 
B) $25,000. 
C) $5,000 
D) $30,000. 
A) $36,000. 
B) $25,000. 
C) $5,000 
D) $30,000.

Question 3

Cesario Corporation purchases a machine for $125,000. It has an estimated salvage value of $10,000 and is expected to produce 50,000 units in its lifetime. During the first year of operation, it produced 15,000 units. To the nearest dollar, the depreciation for the first year under the units of production method will be:

Accepted Answer

A) $37,500. 
B) $31,250. 
C) $34,500. 
D) $28,750. 
A) $37,500. 
B) $31,250. 
C) $34,500. 
D) $28,750.

Question 4

Betta Group purchased Danio, Inc. for $960,000. The market value of Danio's assets and liabilities at the time of purchase were $1,300,000 and $360,000 respectively. The journal entry to record this will include:

Accepted Answer

A) debit to Asset accounts for $1,300,000, credit to Gain on Investments $340,000 and credit to Cash $960,000. 
B) debit to Investments for $960,000, credit to Cash $960,000. 
C) debit to Investments for $1,300,000, credit to Cash $960,000 and credit to Gain on Investment $340,000. 
D) debit to Asset accounts for $1,300,000, debit to Goodwill $20,000, credit to Liabilities $360,000 and credit to Cash $960,000. 
A) debit to Asset accounts for $1,300,000, credit to Gain on Investments $340,000 and credit to Cash $960,000. 
B) debit to Investments for $960,000, credit to Cash $960,000. 
C) debit to Investments for $1,300,000, credit to Cash $960,000 and credit to Gain on Investment $340,000. 
D) debit to Asset accounts for $1,300,000, debit to Goodwill $20,000, credit to Liabilities $360,000 and credit to Cash $960,000.

Question 5

Lubricating a machine on a regular basis would be considered a(n):

Accepted Answer

A) betterment. 
B) capital expenditure. 
C) ordinary repair. 
D) capital expense. 
A) betterment. 
B) capital expenditure. 
C) ordinary repair. 
D) capital expense.

Question 6

Which accounting principle dictates whether the cost of a repair should be expensed?

Accepted Answer

A) Conservatism 
B) Entity 
C) Objectivity 
D) Matching 
A) Conservatism 
B) Entity 
C) Objectivity 
D) Matching

Question 7

Assets that CANNOT be seen, touched, or held are called:

Accepted Answer

A) intangible assets. 
B) natural resources. 
C) plant assets. 
D) tangible assets. 
A) intangible assets. 
B) natural resources. 
C) plant assets. 
D) tangible assets.

Question 8

The following is selected data for Inland Industries:  
The return on assets for 2016 was: (Round your final answer two decimal places, X.XX%.)

Accepted Answer

A) 28.89%. 
B) 18.34%. 
C) 14.64%. 
D) 18.11%. 
A) 28.89%. 
B) 18.34%. 
C) 14.64%. 
D) 18.11%.

Question 9

A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $700. The journal entry to record this transaction is to:

Accepted Answer

A) debit Cash for $700, debit Truck for $50,000, debit Loss on Disposal for $5,300 and credit Accumulated Depreciation - Truck for $56,000. 
B) debit Cash for $700, debit Accumulated Depreciation - Truck for $50,000, debit Loss on Disposal for $5,300 and credit Truck for $56,000. 
C) debit Accumulated Depreciation - Truck for $50,000, debit Loss on Disposal $6,000, and credit Truck for $56,000. 
D) debit Cash for $700, debit Loss on Disposal for $55,300 and credit Truck for $56,000. 
A) debit Cash for $700, debit Truck for $50,000, debit Loss on Disposal for $5,300 and credit Accumulated Depreciation - Truck for $56,000. 
B) debit Cash for $700, debit Accumulated Depreciation - Truck for $50,000, debit Loss on Disposal for $5,300 and credit Truck for $56,000. 
C) debit Accumulated Depreciation - Truck for $50,000, debit Loss on Disposal $6,000, and credit Truck for $56,000. 
D) debit Cash for $700, debit Loss on Disposal for $55,300 and credit Truck for $56,000.

Question 10

A company should choose a depreciation method that most closely matches the cost of the asset against the future revenues it generates.

Accepted Answer

A) True 
 B)False

Question 11

Torres Co. has installed a piece of machinery for a total of $45,000. In its third month of operation, repairs of $900 had to be made on the machine. This $900 would be:

Accepted Answer

A) added to the cost of the machinery. 
B) treated as a repairs and maintenance expense. 
C) capitalized in an asset account. 
D) deducted from cost of the machinery. 
A) added to the cost of the machinery. 
B) treated as a repairs and maintenance expense. 
C) capitalized in an asset account. 
D) deducted from cost of the machinery.

Question 12

Which of the following is NOT a classification for marketable securities?

Accepted Answer

A) Saleable securities 
B) Available-for-sale securities 
C) Trading securities 
D) Held-to-maturity securities 
A) Saleable securities 
B) Available-for-sale securities 
C) Trading securities 
D) Held-to-maturity securities

Question 13

Manitou, Inc. purchased land for $94,000 by signing a note payable for the same amount. Additionally, Manitou paid cash for the following: title insurance of $1,600, a commission of $9,400, $5,000 to remove an unwanted building, $3,400 to level and grade the property, $26,000 for paving, $23,000 to construct a fence around the perimeter, and $5,400 for lighting. The journal entry for the cash payment is:

Accepted Answer

A) debit land $19,400, debit land improvement $54,400, credit cash $73,800 
B) debit land $11,000, debit land improvement $62,800, credit cash $73,800 
C) debit land $113,400, debit land improvement $54,400, credit cash $167,800 
D) debit land $105,000, debit land improvement $62,800, credit cash $167,800 
A) debit land $19,400, debit land improvement $54,400, credit cash $73,800 
B) debit land $11,000, debit land improvement $62,800, credit cash $73,800 
C) debit land $113,400, debit land improvement $54,400, credit cash $167,800 
D) debit land $105,000, debit land improvement $62,800, credit cash $167,800

Question 14

TLR Productions pays $150,000 on January 1 to acquire a patent on a new production tool. It is expected that this patent's useful life will be 6 years. What will the journal entry be to record the first year's amortization?

Accepted Answer

A) Debit Amortization Expense $150,000, credit Cash $150,000 
B) Debit Amortization Expense $25,000, credit Accumulated Amortization $25,000 
C) Debit Patents $150,000, credit Amortization $150,000 
D) Debit Amortization Expense $25,000, credit Patents $25,000 
A) Debit Amortization Expense $150,000, credit Cash $150,000 
B) Debit Amortization Expense $25,000, credit Accumulated Amortization $25,000 
C) Debit Patents $150,000, credit Amortization $150,000 
D) Debit Amortization Expense $25,000, credit Patents $25,000

Question 15

Securities that are actively managed in order to maximize profit as a result of short-term changes in price are:

Accepted Answer

A) trading securities. 
B) available-for sale securities. 
C) held-to-maturity securities. 
D) trading and held-to-maturity securities. 
A) trading securities. 
B) available-for sale securities. 
C) held-to-maturity securities. 
D) trading and held-to-maturity securities.

Question 16

The return on assets (ROA)is the ratio of net income divided by average fixed assets.

Accepted Answer

A) True 
 B)False

Question 17

Intangible assets have no physical form and therefore are not at risk of becoming obsolete.

Accepted Answer

A) True 
 B)False

Question 18

The total cost allocated to each item in a basket purchase is based upon:

Accepted Answer

A) the original cost of the items. 
B) their relative market values. 
C) their individual selling price. 
D) their individual market values. 
A) the original cost of the items. 
B) their relative market values. 
C) their individual selling price. 
D) their individual market values.

Question 19

A piece of equipment that was originally purchased for $33,000, had accumulated depreciation of $25,000, and was sold for $8,000 would recognize a gain of $1,000.

Accepted Answer

A) True 
 B)False

Question 20

A patent has amortization this year of $2,300. The journal entry would be to:

Accepted Answer

A) debit amortization expense-patent, $2,300; credit Accumulated Depreciation-patent, $2,300. 
B) debit accumulated amortization-patent, $2,300; credit patent, $2,300. 
C) debit amortization expense-patent, $2,300; credit patent, $2,300. 
D) debit accumulated amortization-patent, $2,300; credit amortization expense-patent, $2,300. 
A) debit amortization expense-patent, $2,300; credit Accumulated Depreciation-patent, $2,300. 
B) debit accumulated amortization-patent, $2,300; credit patent, $2,300. 
C) debit amortization expense-patent, $2,300; credit patent, $2,300. 
D) debit accumulated amortization-patent, $2,300; credit amortization expense-patent, $2,300.

An example of an other asset would be a trademark.

Betta Group purchased Danio, Inc. for $960,000. The market value of Danio's assets and liabilities at the time of purchase were $1,300,000 and $360,000 respectively. The journal entry to record this will include:

Lubricating a machine on a regular basis would be considered a(n):

Which accounting principle dictates whether the cost of a repair should be expensed?

Assets that CANNOT be seen, touched, or held are called:

The following is selected data for Inland Industries: The return on assets for 2016 was: (Round your final answer two decimal places, X.XX%.)

A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $700. The journal entry to record this transaction is to:

A company should choose a depreciation method that most closely matches the cost of the asset against the future revenues it generates.

Torres Co. has installed a piece of machinery for a total of $45,000. In its third month of operation, repairs of $900 had to be made on the machine. This $900 would be:

Which of the following is NOT a classification for marketable securities?

TLR Productions pays $150,000 on January 1 to acquire a patent on a new production tool. It is expected that this patent's useful life will be 6 years. What will the journal entry be to record the first year's amortization?

Securities that are actively managed in order to maximize profit as a result of short-term changes in price are:

The return on assets (ROA)is the ratio of net income divided by average fixed assets.

Intangible assets have no physical form and therefore are not at risk of becoming obsolete.

The total cost allocated to each item in a basket purchase is based upon:

A piece of equipment that was originally purchased for $33,000, had accumulated depreciation of $25,000, and was sold for $8,000 would recognize a gain of $1,000.

A patent has amortization this year of $2,300. The journal entry would be to:

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

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Exam 8: Long-Term and Other Assets

An example of an other asset would be a trademark.

Betta Group purchased Danio, Inc. for $960,000. The market value of Danio's assets and liabilities at the time of purchase were $1,300,000 and $360,000 respectively. The journal entry to record this will include:

Lubricating a machine on a regular basis would be considered a(n):

Which accounting principle dictates whether the cost of a repair should be expensed?

Assets that CANNOT be seen, touched, or held are called:

The following is selected data for Inland Industries: The return on assets for 2016 was: (Round your final answer two decimal places, X.XX%.)

A truck costing $56,000 has accumulated depreciation of $50,000. The truck is scrapped for $700. The journal entry to record this transaction is to:

A company should choose a depreciation method that most closely matches the cost of the asset against the future revenues it generates.

Torres Co. has installed a piece of machinery for a total of $45,000. In its third month of operation, repairs of $900 had to be made on the machine. This $900 would be:

Which of the following is NOT a classification for marketable securities?

TLR Productions pays $150,000 on January 1 to acquire a patent on a new production tool. It is expected that this patent's useful life will be 6 years. What will the journal entry be to record the first year's amortization?

Securities that are actively managed in order to maximize profit as a result of short-term changes in price are:

The return on assets (ROA)is the ratio of net income divided by average fixed assets.

Intangible assets have no physical form and therefore are not at risk of becoming obsolete.

The total cost allocated to each item in a basket purchase is based upon:

A piece of equipment that was originally purchased for $33,000, had accumulated depreciation of $25,000, and was sold for $8,000 would recognize a gain of $1,000.

A patent has amortization this year of $2,300. The journal entry would be to:

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