Question 1

For tax purposes,small businesses may expense the first $500,000 of equipment expenditures,rather than having to allocate their costs over a number of years.

Accepted Answer

A) True 
 B)False

Question 2

Match each definition with the correct term below.
-Residual value
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 3

Group depreciation is not an appropriate method for a large company calculating depreciation on office equipment.

Accepted Answer

A) True 
 B)False

Question 4

Mineral deposits are subject to a process called amortization.

Accepted Answer

A) True 
 B)False

Question 5

An asset was purchased for $200,000.It had an estimated residual value of $40,000 and an estimated useful life of ten years.After four years of use,the estimated residual value is revised to $28,000.Assuming straight-line depreciation,depreciation expense in year 5 of use would be

Accepted Answer

A)  $18,000. 
B)  $17,144. 
C)  $28,668. 
D)  $15,333. 
A)  $18,000. 
B)  $17,144. 
C)  $28,668. 
D)  $15,333.

Question 6

Which of the following assets is not subject to depreciation,depletion,or amortization?

Accepted Answer

A)  Buildings 
B)  Oil Fields 
C)  Land 
D)  Copyrights 
A)  Buildings 
B)  Oil Fields 
C)  Land 
D)  Copyrights

Question 7

A company purchases an oil well for $400,000.It estimates that the well contains 500,000 barrels,has a ten-year life,and has no salvage value.If the company extracts and sells 40,000 barrels during the first year,how much depletion expense should be recorded?

Accepted Answer

A)  $80,000 
B)  $32,000 
C)  $40,000 
D)  $200,000 
A)  $80,000 
B)  $32,000 
C)  $40,000 
D)  $200,000

Question 8

A truck is purchased for $35,000.It has a five-year life and a $5,000 residual value.Under the double-declining-balance method,what is the accumulated depreciation after two years?

Accepted Answer

A)  $19,200 
B)  $21,200 
C)  $22,400 
D)  $25,600 
A)  $19,200 
B)  $21,200 
C)  $22,400 
D)  $25,600

Question 9

On November 1,2011,Rob's Auto Repair purchased diagnostic equipment for $18,000.The equipment had an estimated residual value of $3,000 and a five-year life and was sold on May 1,2013.Assuming that the company depreciates the asset on a straight-line basis and reports on a calendar-year basis,journalize the following independent transactions in the journal provided.(Omit explanations.)
a.The entry to update depreciation to May 1,2013
b.The entry to record the sale for $15,000
c.The entry to record the sale instead for $11,000
d.The entry to record the sale instead for $13,500

Accepted Answer

The answer of On November 1,2011,Rob's Auto Repair purchased diagnostic...

Question 10

Natural resources are classified as long-term assets on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

Hickman Company purchases a piece of equipment on Jan.2,2013,for $60,000.The equipment has an estimated life of eight years or 50,000 units of production and an estimated residual value of $6,000.Hickman uses a calendar fiscal year.The entry to record the amount of depreciation for 2013,using the straight-line method,is:

Accepted Answer

A)  Depreciation Expense- Equipment 7,500
Cash 7,500 
B)  Depreciation Expense - Equipment 6,750
Accumulated Depreciation- Equipment 6,750 
C)  Depreciation Expense - Equipment 5,000
Accumulated Depreciation- Equipment 5,000 
D)  Accumulated Depreciation - Equipment 4,500
Cash 4,500 
A)  Depreciation Expense- Equipment 7,500
Cash 7,500 
B)  Depreciation Expense - Equipment 6,750
Accumulated Depreciation- Equipment 6,750 
C)  Depreciation Expense - Equipment 5,000
Accumulated Depreciation- Equipment 5,000 
D)  Accumulated Depreciation - Equipment 4,500
Cash 4,500

Question 12

Match each definition with the correct term below.
-Leasehold
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 13

Customer lists are classified as intangible assets.

Accepted Answer

A) True 
 B)False

Question 14

On January 2,2012,Topanga Company purchased a machine for $90,000.The machine has a five-year estimated useful life and a $6,000 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($90,000 - $6,000)÷ 5 ^b$90,00

Question 15

An expenditure to lengthen the useful life of a company vehicle would require a

Accepted Answer

A)  credit to Company Vehicles. 
B)  debit to Vehicle Maintenance Expense. 
C)  credit to Depreciation Expense. 
D)  debit to Accumulated Depreciation. 
A)  credit to Company Vehicles. 
B)  debit to Vehicle Maintenance Expense. 
C)  credit to Depreciation Expense. 
D)  debit to Accumulated Depreciation.

Question 16

Which of the following depreciation methods is the most logical for a machine that produces discrete (i.e.,separate)units?

Accepted Answer

A)  Double-declining-balance 
B)  Straight-line 
C)  Group 
D)  Production 
A)  Double-declining-balance 
B)  Straight-line 
C)  Group 
D)  Production

Question 17

When a company can prove it is worth more than its balance sheet indicates,it may record some goodwill.

Accepted Answer

A) True 
 B)False

Question 18

Dickson Corporation purchased land adjacent to its plant to improve access for trucks making deliveries.Expenditures incurred by the company were as follows: purchase price,$80,000; broker's fees,$14,000; title search and other fees,$12,000; demolition of an old building on the property,$7,400; grading,$2,400; digging foundation for the road,$6,000; laying and paving driveway,$50,000; lighting,$15,000; signs,$3,000.List the items and the amounts that should be included in the Land account.

Accepted Answer

The answer of Dickson Corporation purchased land adjacent to its...

Question 19

When an asset lasts longer than its estimated useful life,depreciation no longer should be recorded past the point at which its carrying value equals its residual value.

Accepted Answer

A) True 
 B)False

Question 20

The Land account would include all of the following costs except

Accepted Answer

A)  lawyers' fees. 
B)  accrued taxes paid by the purchaser. 
C)  the cost of building a fence. 
D)  the cost of tearing down a building. 
A)  lawyers' fees. 
B)  accrued taxes paid by the purchaser. 
C)  the cost of building a fence. 
D)  the cost of tearing down a building.

For tax purposes,small businesses may expense the first $500,000 of equipment expenditures,rather than having to allocate their costs over a number of years.

Group depreciation is not an appropriate method for a large company calculating depreciation on office equipment.

Mineral deposits are subject to a process called amortization.

An asset was purchased for $200,000.It had an estimated residual value of $40,000 and an estimated useful life of ten years.After four years of use,the estimated residual value is revised to $28,000.Assuming straight-line depreciation,depreciation expense in year 5 of use would be

Which of the following assets is not subject to depreciation,depletion,or amortization?

A company purchases an oil well for $400,000.It estimates that the well contains 500,000 barrels,has a ten-year life,and has no salvage value.If the company extracts and sells 40,000 barrels during the first year,how much depletion expense should be recorded?

A truck is purchased for $35,000.It has a five-year life and a $5,000 residual value.Under the double-declining-balance method,what is the accumulated depreciation after two years?

Natural resources are classified as long-term assets on the balance sheet.

Customer lists are classified as intangible assets.

An expenditure to lengthen the useful life of a company vehicle would require a

Which of the following depreciation methods is the most logical for a machine that produces discrete (i.e.,separate)units?

When a company can prove it is worth more than its balance sheet indicates,it may record some goodwill.

When an asset lasts longer than its estimated useful life,depreciation no longer should be recorded past the point at which its carrying value equals its residual value.

The Land account would include all of the following costs except

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

For tax purposes,small businesses may expense the first $500,000 of equipment expenditures,rather than having to allocate their costs over a number of years.

Group depreciation is not an appropriate method for a large company calculating depreciation on office equipment.

Mineral deposits are subject to a process called amortization.

An asset was purchased for $200,000.It had an estimated residual value of $40,000 and an estimated useful life of ten years.After four years of use,the estimated residual value is revised to $28,000.Assuming straight-line depreciation,depreciation expense in year 5 of use would be

Which of the following assets is not subject to depreciation,depletion,or amortization?

A company purchases an oil well for $400,000.It estimates that the well contains 500,000 barrels,has a ten-year life,and has no salvage value.If the company extracts and sells 40,000 barrels during the first year,how much depletion expense should be recorded?

A truck is purchased for $35,000.It has a five-year life and a $5,000 residual value.Under the double-declining-balance method,what is the accumulated depreciation after two years?

Natural resources are classified as long-term assets on the balance sheet.

Customer lists are classified as intangible assets.

An expenditure to lengthen the useful life of a company vehicle would require a

Which of the following depreciation methods is the most logical for a machine that produces discrete (i.e.,separate)units?

When a company can prove it is worth more than its balance sheet indicates,it may record some goodwill.

When an asset lasts longer than its estimated useful life,depreciation no longer should be recorded past the point at which its carrying value equals its residual value.

The Land account would include all of the following costs except

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