Question 1

Research and development costs normally are capitalized and amortized over the estimated sales life of the product developed.

Accepted Answer

A) True 
 B)False

Question 2

Depreciation is a process of allocation,not of valuation.

Accepted Answer

A) True 
 B)False

Question 3

A company purchases land and a building on the land.The land is appraised at $160,000 and the building at $640,000.If the Land account is debited for $208,000,then the total purchase price for the land and building must have been

Accepted Answer

A)  $800,000. 
B)  $832,000. 
C)  $1,040,000. 
D)  $848,000. 
A)  $800,000. 
B)  $832,000. 
C)  $1,040,000. 
D)  $848,000.

Question 4

One reason for an asset's limited useful life is physical deterioration.

Accepted Answer

A) True 
 B)False

Question 5

An older term for long-term assets is variable assets.

Accepted Answer

A) True 
 B)False

Question 6

The exclusive right to sell a computer program is covered by which intangible?

Accepted Answer

A)  Software 
B)  Goodwill 
C)  Customer list 
D)  Trademark 
A)  Software 
B)  Goodwill 
C)  Customer list 
D)  Trademark

Question 7

The Equipment account would include all of the following costs except

Accepted Answer

A)  buying expenses. 
B)  maintenance costs. 
C)  equipment test runs. 
D)  excise taxes and tariffs. 
A)  buying expenses. 
B)  maintenance costs. 
C)  equipment test runs. 
D)  excise taxes and tariffs.

Question 8

Match each definition with the correct term below.
-Additions
A)Enlargements of a plant's physical layout.
B)A right to occupy land or buildings under a long-term contract.
C)The portion of an asset's acquisition cost that a company expects to recover when it disposes of the asset.
D)The proportional allocation of the cost of a natural resource to the units extracted.
E)A registered symbol that can be used only by its owner to identify a product or service.
F)The excess of the amount paid for a business over the fair market value of the business's net assets.
G)The periodic allocation of the cost of an intangible long-lived asset to the periods it benefits.
H)Improvements to a plant asset that do not add to the plant's physical layout.
I)The total number of service units expected from a long-term asset.
J)The periodic allocation of the cost of a tangible long-lived asset over its estimated useful life.

Accepted Answer

The answer of Match each definition with the correct term...

Question 9

On January 2,2012,Vanowen Company purchased a machine for $80,000.The machine has an eight-year estimated useful life and an $8,000 estimated residual value.In addition,the company expects to use the machine 200,000 hours.Assuming that the machine was used 35,000 hours during 2013,complete the following chart.If a figure cannot be determined,indicate so by placing an X in the box.(Show your work.)

Accepted Answer

@#IMG-DLM& ^a$80,000 - $8,000 = $72,000 ÷

Question 10

According to generally accepted accounting principles,the proper accounting treatment for the cost of a trademark that management feels will retain its value indefinitely is to

Accepted Answer

A)  write the cost off immediately. 
B)  amortize the cost over a reasonable life. 
C)  amortize the cost over five years. 
D)  carry the cost as an asset indefinitely. 
A)  write the cost off immediately. 
B)  amortize the cost over a reasonable life. 
C)  amortize the cost over five years. 
D)  carry the cost as an asset indefinitely.

Question 11

The expensing of a long-lived asset such as a wastebasket is justified by which of the following accounting rules or principles?

Accepted Answer

A)  Matching 
B)  Materiality 
C)  Cost-benefit 
D)  Conservatism 
A)  Matching 
B)  Materiality 
C)  Cost-benefit 
D)  Conservatism

Question 12

On January 1,a machine with a useful life of five years and a residual value of $6,000 is purchased for $30,000.What is the depreciation expense in year 2 using the double-declining-balance method?

Accepted Answer

A)  $7,200 
B)  $9,600 
C)  $8,160 
D)  $12,000 
A)  $7,200 
B)  $9,600 
C)  $8,160 
D)  $12,000

Question 13

According to generally accepted accounting principles,goodwill is recorded as an asset

Accepted Answer

A)  when favorable factors combine to create goodwill. 
B)  when a company has superior earning power. 
C)  when it is paid for as part of the purchase of a business. 
D)  under no circumstances. 
A)  when favorable factors combine to create goodwill. 
B)  when a company has superior earning power. 
C)  when it is paid for as part of the purchase of a business. 
D)  under no circumstances.

Question 14

A specialized piece of equipment closely associated with a mine is most likely to be depreciated over a shorter than normal useful life because the

Accepted Answer

A)  equipment will be fully utilized. 
B)  income tax laws require that a shorter life be used. 
C)  equipment contains certain defects. 
D)  mine is expected to be fully depleted in the shorter length of time. 
A)  equipment will be fully utilized. 
B)  income tax laws require that a shorter life be used. 
C)  equipment contains certain defects. 
D)  mine is expected to be fully depleted in the shorter length of time.

Question 15

A $2,000 gain on the sale of an asset means that $2,000 in cash was received.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements is true about successful efforts accounting?

Accepted Answer

A)  It is a depreciation method 
B)  All costs are recorded as assets and then depleted over the resource's useful life. 
C)  The cost of a dry well would be written off immediately as a loss. 
D)  The cost of successful exploration is recorded as an asset and is not written off. 
A)  It is a depreciation method 
B)  All costs are recorded as assets and then depleted over the resource's useful life. 
C)  The cost of a dry well would be written off immediately as a loss. 
D)  The cost of successful exploration is recorded as an asset and is not written off.

Question 17

Failure to record depletion for a given accounting period will result in

Accepted Answer

A)  understated total assets. 
B)  understated total liabilities. 
C)  overstated net income. 
D)  overstated total liabilities. 
A)  understated total assets. 
B)  understated total liabilities. 
C)  overstated net income. 
D)  overstated total liabilities.

Question 18

Which of the following items is not classified as a natural resource?

Accepted Answer

A)  Mineral deposits 
B)  A gas reserve 
C)  An oil well 
D)  Patent 
A)  Mineral deposits 
B)  A gas reserve 
C)  An oil well 
D)  Patent

Question 19

Which of the following most appropriately describes depreciation?

Accepted Answer

A)  Decline in value of plant asset 
B)  Allocation of cost of plant asset 
C)  Physical deterioration of plant asset 
D)  Gradual obsolescence of plant asset 
A)  Decline in value of plant asset 
B)  Allocation of cost of plant asset 
C)  Physical deterioration of plant asset 
D)  Gradual obsolescence of plant asset

Question 20

Accelerated depreciation assumes all of the following except that

Accepted Answer

A)  asset benefit increases with each year of use. 
B)  the asset provides more benefit in the early years. 
C)  obsolescence makes an asset less valuable in its later years. 
D)  repair expense is less in the early years than in the later years. 
A)  asset benefit increases with each year of use. 
B)  the asset provides more benefit in the early years. 
C)  obsolescence makes an asset less valuable in its later years. 
D)  repair expense is less in the early years than in the later years.

Research and development costs normally are capitalized and amortized over the estimated sales life of the product developed.

Depreciation is a process of allocation,not of valuation.

A company purchases land and a building on the land.The land is appraised at $160,000 and the building at $640,000.If the Land account is debited for $208,000,then the total purchase price for the land and building must have been

One reason for an asset's limited useful life is physical deterioration.

An older term for long-term assets is variable assets.

The exclusive right to sell a computer program is covered by which intangible?

The Equipment account would include all of the following costs except

According to generally accepted accounting principles,the proper accounting treatment for the cost of a trademark that management feels will retain its value indefinitely is to

The expensing of a long-lived asset such as a wastebasket is justified by which of the following accounting rules or principles?

On January 1,a machine with a useful life of five years and a residual value of $6,000 is purchased for $30,000.What is the depreciation expense in year 2 using the double-declining-balance method?

According to generally accepted accounting principles,goodwill is recorded as an asset

A specialized piece of equipment closely associated with a mine is most likely to be depreciated over a shorter than normal useful life because the

A $2,000 gain on the sale of an asset means that $2,000 in cash was received.

Which of the following statements is true about successful efforts accounting?

Failure to record depletion for a given accounting period will result in

Which of the following items is not classified as a natural resource?

Which of the following most appropriately describes depreciation?

Accelerated depreciation assumes all of the following except that

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 10: Long Term Assets

Research and development costs normally are capitalized and amortized over the estimated sales life of the product developed.

Depreciation is a process of allocation,not of valuation.

A company purchases land and a building on the land.The land is appraised at $160,000 and the building at $640,000.If the Land account is debited for $208,000,then the total purchase price for the land and building must have been

One reason for an asset's limited useful life is physical deterioration.

An older term for long-term assets is variable assets.

The exclusive right to sell a computer program is covered by which intangible?

The Equipment account would include all of the following costs except

According to generally accepted accounting principles,the proper accounting treatment for the cost of a trademark that management feels will retain its value indefinitely is to

The expensing of a long-lived asset such as a wastebasket is justified by which of the following accounting rules or principles?

On January 1,a machine with a useful life of five years and a residual value of $6,000 is purchased for $30,000.What is the depreciation expense in year 2 using the double-declining-balance method?

According to generally accepted accounting principles,goodwill is recorded as an asset

A specialized piece of equipment closely associated with a mine is most likely to be depreciated over a shorter than normal useful life because the

A $2,000 gain on the sale of an asset means that $2,000 in cash was received.

Which of the following statements is true about successful efforts accounting?

Failure to record depletion for a given accounting period will result in

Which of the following items is not classified as a natural resource?

Which of the following most appropriately describes depreciation?

Accelerated depreciation assumes all of the following except that

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters