Question 1

Plant asset exchanges can only be categorized as the exchange of similar assets.

Accepted Answer

A) True 
 B)False

Question 2

The exclusive right to sell a computer program is called a copyright.

Accepted Answer

A) True 
 B)False

Question 3

Match each definition with the correct term below.
-Trademark
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 4

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 production method and assuming that 6,100 units are produced,is:

Accepted Answer

A)  Equipment 6,100
Accumulated Depreciation- Equipment 6,100 
B)  Equipment 6,344
Accumulated Depreciation- Equipment 6,344 
C)  Depreciation Expense - Equipment 6,588
Accumulated Depreciation- Equipment 6,588 
D)  Depreciation Expense - Equipment 6,832
Accumulated Depreciation- Equipment 6,832 
A)  Equipment 6,100
Accumulated Depreciation- Equipment 6,100 
B)  Equipment 6,344
Accumulated Depreciation- Equipment 6,344 
C)  Depreciation Expense - Equipment 6,588
Accumulated Depreciation- Equipment 6,588 
D)  Depreciation Expense - Equipment 6,832
Accumulated Depreciation- Equipment 6,832

Question 5

The exclusive right to sell a product within a certain geographic area is called a

Accepted Answer

A)  noncompete covenant. 
B)  franchise. 
C)  trademark. 
D)  copyright. 
A)  noncompete covenant. 
B)  franchise. 
C)  trademark. 
D)  copyright.

Question 6

All of the following are possible reasons for using accelerated depreciation except

Accepted Answer

A)  greater efficiency of assets when new. 
B)  increasing repair costs in later years. 
C)  rapid changes in technology. 
D)  increasing use of an asset over the years. 
A)  greater efficiency of assets when new. 
B)  increasing repair costs in later years. 
C)  rapid changes in technology. 
D)  increasing use of an asset over the years.

Question 7

In 2013,McMinn Mining purchased a mineral deposit for $72,000,000.It is estimated that 30,000,000 tons can be extracted from the mine.Calculate depletion expense during 2013 when 1,600,000 tons were extracted and sold.

Accepted Answer

$3,840,000 ($72,000,

Question 8

The cost of repairing a machine damaged during installation should be charged to the cost of the equipment.

Accepted Answer

A) True 
 B)False

Question 9

A capital expenditure results in a debit to a(n)

Accepted Answer

A)  expense account. 
B)  revenue account. 
C)  asset account. 
D)  stockholders' equity account. 
A)  expense account. 
B)  revenue account. 
C)  asset account. 
D)  stockholders' equity account.

Question 10

Asset impairment occurs when the fair value of a long-term asset falls below its carrying value.

Accepted Answer

A) True 
 B)False

Question 11

A truck was purchased for $80,000.It has a current carrying value of $52,000 and had a depreciable cost of $72,000.Its estimated residual value must have been

Accepted Answer

A)  $8,000. 
B)  $20,000. 
C)  $28,000. 
D)  impossible to determine from the facts given. 
A)  $8,000. 
B)  $20,000. 
C)  $28,000. 
D)  impossible to determine from the facts given.

Question 12

Driveways and parking lots are properly included in the Land Improvements account because they are subject to depreciation.

Accepted Answer

A) True 
 B)False

Question 13

The cost of equipment would include the cost of test runs to see that the equipment is operating properly.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following would be considered a capital expenditure?

Accepted Answer

A)  A truck tune-up 
B)  Machine maintenance 
C)  Installation of a solar heating system 
D)  Painting a room 
A)  A truck tune-up 
B)  Machine maintenance 
C)  Installation of a solar heating system 
D)  Painting a room

Question 15

The unexpired cost of a plant asset is referred to as its

Accepted Answer

A)  depreciable cost. 
B)  carrying value. 
C)  fair value. 
D)  impairment value. 
A)  depreciable cost. 
B)  carrying value. 
C)  fair value. 
D)  impairment value.

Question 16

Suppose an accounting intern mistakenly calculated depreciation expense on the Land account.She assigned it a 50-year life and a residual value of $10,000,000.Using the cost of the land (assume it was $811,000,000)and the straight-line method of depreciation,discuss the dollar effect of this error on pretax earnings and total assets.

Accepted Answer

The depreciable amount would be the $811

Question 17

The straight-line method is an accelerated method of depreciation.

Accepted Answer

A) True 
 B)False

Question 18

Small expenditures for what ordinarily are considered revenue expenditures are expensed as incurred.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is irrelevant in computing a machine's depreciation expense using the production method?

Accepted Answer

A)  Actual units produced in a given period 
B)  Residual value 
C)  Estimated useful life in years 
D)  Estimated units produced over its life 
A)  Actual units produced in a given period 
B)  Residual value 
C)  Estimated useful life in years 
D)  Estimated units produced over its life

Question 20

Which of the following would be considered a capital expenditure?

Accepted Answer

A)  Cost to acquire a printing press 
B)  Cost to lubricate a machine 
C)  Cost to replace some light bulbs 
D)  Cost to paint the factory wall 
A)  Cost to acquire a printing press 
B)  Cost to lubricate a machine 
C)  Cost to replace some light bulbs 
D)  Cost to paint the factory wall

Plant asset exchanges can only be categorized as the exchange of similar assets.

The exclusive right to sell a computer program is called a copyright.

The exclusive right to sell a product within a certain geographic area is called a

All of the following are possible reasons for using accelerated depreciation except

In 2013,McMinn Mining purchased a mineral deposit for $72,000,000.It is estimated that 30,000,000 tons can be extracted from the mine.Calculate depletion expense during 2013 when 1,600,000 tons were extracted and sold.

The cost of repairing a machine damaged during installation should be charged to the cost of the equipment.

A capital expenditure results in a debit to a(n)

Asset impairment occurs when the fair value of a long-term asset falls below its carrying value.

A truck was purchased for $80,000.It has a current carrying value of $52,000 and had a depreciable cost of $72,000.Its estimated residual value must have been

Driveways and parking lots are properly included in the Land Improvements account because they are subject to depreciation.

The cost of equipment would include the cost of test runs to see that the equipment is operating properly.

Which of the following would be considered a capital expenditure?

The unexpired cost of a plant asset is referred to as its

The straight-line method is an accelerated method of depreciation.

Small expenditures for what ordinarily are considered revenue expenditures are expensed as incurred.

Which of the following is irrelevant in computing a machine's depreciation expense using the production method?

Which of the following would be considered a capital expenditure?

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

Plant asset exchanges can only be categorized as the exchange of similar assets.

The exclusive right to sell a computer program is called a copyright.

The exclusive right to sell a product within a certain geographic area is called a

All of the following are possible reasons for using accelerated depreciation except

In 2013,McMinn Mining purchased a mineral deposit for $72,000,000.It is estimated that 30,000,000 tons can be extracted from the mine.Calculate depletion expense during 2013 when 1,600,000 tons were extracted and sold.

The cost of repairing a machine damaged during installation should be charged to the cost of the equipment.

A capital expenditure results in a debit to a(n)

Asset impairment occurs when the fair value of a long-term asset falls below its carrying value.

A truck was purchased for $80,000.It has a current carrying value of $52,000 and had a depreciable cost of $72,000.Its estimated residual value must have been

Driveways and parking lots are properly included in the Land Improvements account because they are subject to depreciation.

The cost of equipment would include the cost of test runs to see that the equipment is operating properly.

Which of the following would be considered a capital expenditure?

The unexpired cost of a plant asset is referred to as its

The straight-line method is an accelerated method of depreciation.

Small expenditures for what ordinarily are considered revenue expenditures are expensed as incurred.

Which of the following is irrelevant in computing a machine's depreciation expense using the production method?

Which of the following would be considered a capital expenditure?

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