Question 1

When calculating depletion, what is the proper treatment of residual value?

Accepted Answer

A) There is no residual value in the calculation of depletion expense. 
B) The residual value is subtracted from cost to determine the depletable base. 
C) The residual value is added to cost to determine the depletable base. 
D) Residual value is ignored until the end of the asset's life at which time it is used to limit the final year's expense amount. 
A) There is no residual value in the calculation of depletion expense. 
B) The residual value is subtracted from cost to determine the depletable base. 
C) The residual value is added to cost to determine the depletable base. 
D) Residual value is ignored until the end of the asset's life at which time it is used to limit the final year's expense amount.

Question 2

A company replaced tires on a vehicle and debited the amount to Vehicle instead of Repairs and Maintenance Expense. Which of the following would occur because of this error?

Accepted Answer

A) Expenses would be understated. 
B) Net income would be understated. 
C) Retained Earnings would be understated. 
D) Assets would be understated. 
A) Expenses would be understated. 
B) Net income would be understated. 
C) Retained Earnings would be understated. 
D) Assets would be understated.

Question 3

KLF Co. inadvertently recorded a $7,000 betterment as an ordinary repair. Which of the following will occur as a result of this mistake?

Accepted Answer

A) Assets will be overstated by $7,000. 
B) Assets will be understated by $7,000. 
C) Net income will be overstated by $7,000. 
D) Retained Earnings will be overstated by $7,000. 
A) Assets will be overstated by $7,000. 
B) Assets will be understated by $7,000. 
C) Net income will be overstated by $7,000. 
D) Retained Earnings will be overstated by $7,000.

Question 4

Information needed to compute a depletion charge per unit includes the:

Accepted Answer

A) estimated total amount of resources available for removal. 
B) amount of resources removed during the period. 
C) cumulative amount of resources removed. 
D) amount of resources sold during the period. 
A) estimated total amount of resources available for removal. 
B) amount of resources removed during the period. 
C) cumulative amount of resources removed. 
D) amount of resources sold during the period.

Question 5

Which of the following matches the correct cost allocation terms with the given assets?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 6

After 4 years, a machine had an accumulated depreciation of $40,000. Originally, the machine had an anticipated life of 8 years and a salvage value of $6,000. If the current book value after 4 years is $45,000 and the machine has only 2 years of useable life left, how much will be depreciated in Year 5 and in Year 6 using the straight-line method of depreciation, and assuming the salvage value is still $6,000? (Round your final answer to the nearest dollar.)

Accepted Answer

A) $10,625 each year 
B) $9,875 each year 
C) $19,500 each year 
D) $22,500 each year 
A) $10,625 each year 
B) $9,875 each year 
C) $19,500 each year 
D) $22,500 each year

Question 7

The cash registers at WalMart are an example of a(n)_______, which would be expensed through _________.

Accepted Answer

A) fixed asset; depreciation 
B) physical asset; depletion 
C) plant asset; amortization 
D) intangible asset; amortization 
A) fixed asset; depreciation 
B) physical asset; depletion 
C) plant asset; amortization 
D) intangible asset; amortization

Question 8

New equipment was purchased on January 1 for $144,000. It has a salvage value of $28,000 and a useful life of 10 years. To the nearest dollar, how much will the depreciation expense for the equipment be for the first year using the straight-line method?

Accepted Answer

A) $967 
B) $14,400 
C) $10 
D) $11,600 
A) $967 
B) $14,400 
C) $10 
D) $11,600

Question 9

Which of the following would be considered part of the cost of a printing press?

Accepted Answer

A) The medical fees for a worker who was injured while installing the press 
B) The cost of a test run to make sure the press worked properly 
C) Both A and B are part of the cost of the printing press. 
D) Neither A nor B are part of the cost of the printing press. 
A) The medical fees for a worker who was injured while installing the press 
B) The cost of a test run to make sure the press worked properly 
C) Both A and B are part of the cost of the printing press. 
D) Neither A nor B are part of the cost of the printing press.

Question 10

The fixed asset turnover is the ratio of sales to average fixed assets.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) Accumulated Depreciation-Old Vehicle 
B) Old Vehicle 
C) Gain on Exchange of Assets 
D) Notes Payable 
A) Accumulated Depreciation-Old Vehicle 
B) Old Vehicle 
C) Gain on Exchange of Assets 
D) Notes Payable

When calculating depletion, what is the proper treatment of residual value?

A company replaced tires on a vehicle and debited the amount to Vehicle instead of Repairs and Maintenance Expense. Which of the following would occur because of this error?

KLF Co. inadvertently recorded a $7,000 betterment as an ordinary repair. Which of the following will occur as a result of this mistake?

Information needed to compute a depletion charge per unit includes the:

Which of the following matches the correct cost allocation terms with the given assets?

The cash registers at WalMart are an example of a(n)_, which would be expensed through ___.

New equipment was purchased on January 1 for $144,000. It has a salvage value of $28,000 and a useful life of 10 years. To the nearest dollar, how much will the depreciation expense for the equipment be for the first year using the straight-line method?

Which of the following would be considered part of the cost of a printing press?

The fixed asset turnover is the ratio of sales to average fixed assets.

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

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

When calculating depletion, what is the proper treatment of residual value?

A company replaced tires on a vehicle and debited the amount to Vehicle instead of Repairs and Maintenance Expense. Which of the following would occur because of this error?

KLF Co. inadvertently recorded a $7,000 betterment as an ordinary repair. Which of the following will occur as a result of this mistake?

Information needed to compute a depletion charge per unit includes the:

Which of the following matches the correct cost allocation terms with the given assets?

The cash registers at WalMart are an example of a(n)_______, which would be expensed through _________.

New equipment was purchased on January 1 for $144,000. It has a salvage value of $28,000 and a useful life of 10 years. To the nearest dollar, how much will the depreciation expense for the equipment be for the first year using the straight-line method?

Which of the following would be considered part of the cost of a printing press?

The fixed asset turnover is the ratio of sales to average fixed assets.

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

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

The cash registers at WalMart are an example of a(n)_, which would be expensed through ___.