Question 1

A method that charges the same amount of expense to each period of the asset's useful life is called:

Accepted Answer

A) Accelerated depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS) depreciation. 
A) Accelerated depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS) depreciation.

Question 2

_____________________ depreciation uses a depreciation rate that is a multiple of the straight-line rate and applies it to an asset's beginning-of-period book value.

Accepted Answer

The answer of _____________________ depreciation uses a depreciation rate that...

Question 3

Plant assets refer to intangible assets that are used in the operations of a business.

Accepted Answer

A) True 
 B)False

Question 4

Amortization:

Accepted Answer

A) Is the systematic allocation of the cost of an intangible asset to expense over its estimated useful life. 
B) Is the process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use. 
C) Is the process of allocating the cost of natural resources to periods when they are consumed. 
D) Is an accelerated form of expensing an asset's cost. 
E) Is also called depletion. 
A) Is the systematic allocation of the cost of an intangible asset to expense over its estimated useful life. 
B) Is the process of allocating to expense the cost of a plant asset to the accounting periods benefiting from its use. 
C) Is the process of allocating the cost of natural resources to periods when they are consumed. 
D) Is an accelerated form of expensing an asset's cost. 
E) Is also called depletion.

Question 5

Lomax Enterprises purchased a depreciable asset for $22,000 on March 1,Year 1.The asset will be depreciated using the straight-line method over its four-year useful life.Assuming the asset's salvage value is $2,000,Lomax Enterprises should recognize depreciation expense in Year 2 in the amount of:

Accepted Answer

A) $19,166.67 
B) $5,000.00 
C) $5,500.00 
D) $20,000.00 
E) $4,166.67 
A) $19,166.67 
B) $5,000.00 
C) $5,500.00 
D) $20,000.00 
E) $4,166.67

Question 6

A plant asset's useful life might not be the same as its productive life.

Accepted Answer

A) True 
 B)False

Question 7

Match each of the following terms with the appropriate definitions.

-Assets that increase the benefits of land, have a limited useful life, and are subject to depreciation.

Accepted Answer

A) Obsolescence 
B) Amortization 
C) Depletion 
D) Salvage value 
E) Book value
F)Land improvements
G)Copyright
H)Inadequacy
I)Patent 
A) Obsolescence 
B) Amortization 
C) Depletion 
D) Salvage value 
E) Book value
F)Land improvements
G)Copyright
H)Inadequacy
I)Patent

Question 8

Land improvements are:

Accepted Answer

A) Assets that increase the usefulness of land, and like land, are not depreciated. 
B) Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation. 
C) Included in the cost of the land account. 
D) Expensed in the period incurred. 
E) Also called basket purchases. 
A) Assets that increase the usefulness of land, and like land, are not depreciated. 
B) Assets that increase the usefulness of land, but that have a limited useful life and are subject to depreciation. 
C) Included in the cost of the land account. 
D) Expensed in the period incurred. 
E) Also called basket purchases.

Question 9

A patent:

Accepted Answer

A) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. 
B) Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years. 
C) Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. 
D) Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years. 
A) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. 
B) Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years. 
C) Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. 
D) Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years.

Question 10

Carmel Company acquires a mineral deposit at a cost of $5,900,000.It incurs additional costs of $600,000 to access the deposit,which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract.What journal entry would be needed to record the expense for the first year assuming 418,000 tons were mined?

Accepted Answer

A) Debit Depletion Expense $1,233,100; credit Accumulated Depletion $1,233,100. 
B) Debit Amortization Expense $1,358,500; credit Accumulated Amortization $1,358,500. 
C) Debit Depreciation Expense $1,358,500; credit Accumulated Depreciation $1,358,500. 
D) Debit Depletion Expense $1,358,500; credit Accumulated Depletion $1,358,500. 
E) Debit Depreciation Expense $1,233,100; credit Accumulated Depreciation $1,233,100. 
A) Debit Depletion Expense $1,233,100; credit Accumulated Depletion $1,233,100. 
B) Debit Amortization Expense $1,358,500; credit Accumulated Amortization $1,358,500. 
C) Debit Depreciation Expense $1,358,500; credit Accumulated Depreciation $1,358,500. 
D) Debit Depletion Expense $1,358,500; credit Accumulated Depletion $1,358,500. 
E) Debit Depreciation Expense $1,233,100; credit Accumulated Depreciation $1,233,100.

Question 11

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

Accepted Answer

A) True 
 B)False

Question 12

Marble Company purchased a machine costing $120,000,terms 1/10,n/30.The machine was shipped FOB shipping point and freight charges were $2,000.The machine requires special mounting and wiring connections costing $10,000.When installing the machine,$1,300 in damages occurred.Materials costing $1,500 are used in testing and adjusting the machine to produce a satisfactory product.Compute the cost recorded for this machine assuming Marble paid within the discount period.

Accepted Answer

A) $131,100. 
B) $134,800. 
C) $132,300. 
D) $133,600. 
E) $130,300. 
A) $131,100. 
B) $134,800. 
C) $132,300. 
D) $133,600. 
E) $130,300.

Question 13

When an asset is purchased (or disposed of)at a time other than the beginning or the end of an accounting period,depreciation is recorded for part of a year so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation.

Accepted Answer

A) True 
 B)False

Question 14

Match between columns
                        Premises: A change in a financial statement amount that results from new information,subsequent developments,better insight,or improved judgment.
The process of allocating the cost of natural resources to periods when they are consumed.
A depreciation method that charges a varying amount to expense for each period of an asset's useful life depending on its usage.
An expenditure reported on the current income statement as an expense because it does not provide a material benefit in future periods.
A measure of a company's ability to use its assets to generate sales.
An expenditure to make a plant asset more efficient or productive.
The amount by which the company's value exceeds the value of its individual assets and liabilities.
Certain nonphysical assets used in operations that confer on their owners long-term rights,privileges,or competitive advantages.
A method that yields larger depreciation expense during the early years of an asset's life and smaller expense in the later years.
Expenditures made to keep a plant asset in normal,good operating condition.

Accepted Answer

The Answer of Goodwill and Units-of production method and Betterment is...

Question 15

A leasehold refers to the rights the lessor grants to the lessee under the terms of the lease.

Accepted Answer

A) True 
 B)False

Question 16

On September 30 of the current year,a company acquired and placed in service a machine at a cost of $700,000.It has been estimated that the machine has a service life of five years and a salvage value of $40,000.Using the double-declining-balance method of depreciation,prepare a schedule showing depreciation amounts for the current year and the next 4 years (round answers to the nearest dollar).The company closes its books on December 31 of each year.

Accepted Answer

@#IMG-DLM& *for 3 months.
**fo

Question 17

A copyright:

Accepted Answer

A) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. 
B) Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years. 
C) Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. 
D) Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 20 years. 
A) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. 
B) Gives its owner an exclusive right to manufacture and sell a patented item or to use a process for 20 years. 
C) Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. 
D) Is the amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E) Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 20 years.

Question 18

If land is purchased as a building site,the cost of removing existing structures is not charged to the Land account.

Accepted Answer

A) True 
 B)False

Question 19

What are some of the variables that make a plant asset's useful life difficult to predict?

Accepted Answer

There are several factors that make it d

Question 20

Intangible assets are nonphysical assets used in operations that confer on their owners' long-term rights,privileges,or competitive advantages.

Accepted Answer

A) True 
 B)False

Exam 10: Plant Assets, natural Resources, and Intangibles

A method that charges the same amount of expense to each period of the asset's useful life is called:

_____________________ depreciation uses a depreciation rate that is a multiple of the straight-line rate and applies it to an asset's beginning-of-period book value.

Plant assets refer to intangible assets that are used in the operations of a business.

Amortization:

Lomax Enterprises purchased a depreciable asset for $22,000 on March 1,Year 1.The asset will be depreciated using the straight-line method over its four-year useful life.Assuming the asset's salvage value is $2,000,Lomax Enterprises should recognize depreciation expense in Year 2 in the amount of:

A plant asset's useful life might not be the same as its productive life.

Match each of the following terms with the appropriate definitions. -Assets that increase the benefits of land, have a limited useful life, and are subject to depreciation.

Land improvements are:

A patent:

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

When an asset is purchased (or disposed of)at a time other than the beginning or the end of an accounting period,depreciation is recorded for part of a year so that the year of purchase or the year of disposal is charged with its share of the asset's depreciation.

A leasehold refers to the rights the lessor grants to the lessee under the terms of the lease.

A copyright:

If land is purchased as a building site,the cost of removing existing structures is not charged to the Land account.

What are some of the variables that make a plant asset's useful life difficult to predict?

Intangible assets are nonphysical assets used in operations that confer on their owners' long-term rights,privileges,or competitive advantages.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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