Question 1

A gain on disposal of an asset is recorded when cash received is less than book value.

Accepted Answer

A) True 
 B)False

Question 2

An asset costs $80,000 and has a salvage value of $7,000.It has a four-year life.Using double-declining-balance depreciation,Year 1 depreciation would be:

Accepted Answer

A)  $20,000. 
B)  $40,000. 
C)  $18,250. 
D)  $36,500. 
A)  $20,000. 
B)  $40,000. 
C)  $18,250. 
D)  $36,500.

Question 3

Accumulated depletion is a contra asset account.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following asset categories would include fencing?

Accepted Answer

A)  Machinery and equipment 
B)  Land improvements 
C)  Buildings 
D)  Land 
A)  Machinery and equipment 
B)  Land improvements 
C)  Buildings 
D)  Land

Question 5

When a plant asset is sold,the first step is to bring the depreciation up to date.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following depreciation methods allocates a fixed amount of depreciation to miles driven,hours used,or some other measure of the asset's utilization?

Accepted Answer

A)  Straight-line 
B)  Declining-balance 
C)  Units-of-production 
D)  Double-declining-balance 
A)  Straight-line 
B)  Declining-balance 
C)  Units-of-production 
D)  Double-declining-balance

Question 7

Navajo Mining Company purchased a mine in 2013 for $3,400,000.It was estimated that the mine contained 200,000 tons of ore and that the mine would be worthless after all of the ore was extracted.The company extracted 25,000 tons of ore in 2013 and 30,000 tons of ore in 2014. What is depletion expense for 2014?

Accepted Answer

A)  $425,000 
B)  $680,000 
C)  $340,000 
D)  $510,000 
A)  $425,000 
B)  $680,000 
C)  $340,000 
D)  $510,000

Question 8

A plant asset is sold for $1,000.The original cost was $9,000,salvage value was estimated at $200,and useful life was estimated at 12 years.At time of sale,accumulated depreciation was $8,500.The sale resulted in a loss of $500.

Accepted Answer

A) True 
 B)False

Question 9

A mine is purchased for $4,000,000.There will be a salvage value of $300,000 when the land is restored after mining is completed.The mine has an estimated 250,000 tons of coal.What is the depletable cost per ton of coal?

Accepted Answer

A)  $13.33 
B)  $16.00 
C)  $14.80 
D)  Cannot be determined from given information 
A)  $13.33 
B)  $16.00 
C)  $14.80 
D)  Cannot be determined from given information

Question 10

To determine if there is a gain or loss on the sale of an asset,you must compare:

Accepted Answer

A)  sales price and book value. 
B)  sales price and salvage value. 
C)  sales price and original cost. 
D)  book value and salvage cost. 
A)  sales price and book value. 
B)  sales price and salvage value. 
C)  sales price and original cost. 
D)  book value and salvage cost.

Question 11

A loss on disposal of an asset is recorded when cash received is less than book value.

Accepted Answer

A) True 
 B)False

Question 12

Barnhart's sold a piece of restaurant equipment to another restaurant on July 1,2013 for $1,100 cash.The equipment originally cost $12,000,had an estimated life of 20 years,and an estimated salvage value
of $2,000.Barnhart's had recorded total depreciation of $9,000 through the end of 2012,using the straight-line method.Barnhart's had to update the depreciation of the asset before recording the sale.Please provide the entry to record that additional depreciation.
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Accepted Answer

This question is no

Question 13

A company purchased equipment for $100,000 in 2012.The machine will be used for 10,000 hours and will have a residual value of $20,000.The equipment was used for 2,400 hours in 2012.How much depreciation will be recorded in 2012 if the company elects the units-of-production method?

Accepted Answer

A)  $19,200 
B)  $20,000 
C)  $10,000 
D)  $24,000 
A)  $19,200 
B)  $20,000 
C)  $10,000 
D)  $24,000

Question 14

The major ethical issues surrounding the recording of assets have to do with how assets are defined.

Accepted Answer

A) True 
 B)False

Question 15

A loss occurs on the exchange of a plant asset if the market value of the new asset received is greater than the total amount given up in the exchange.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following accounting methods is the method used to compute depletion?

Accepted Answer

A)  Straight-line 
B)  Declining-balance 
C)  Units-of-production 
D)  First-In, First-Out 
A)  Straight-line 
B)  Declining-balance 
C)  Units-of-production 
D)  First-In, First-Out

Question 17

On January 1,2013,a company buys a truck for $42,000 cash.It has estimated residual value of $2,000,and an estimated life of 4 years,or 200,000 miles.Assume the company uses units-of-production depreciation.The truck drove 40,000 miles in 2013,60,000 miles in 2014,80,000 miles in 2015,and 20,000 miles in 2016.What is the depreciation rate?

Accepted Answer

A)  $4.00/mile 
B)  $0.21/mile 
C)  $0.20/mile 
D)  $0.25/mile 
A)  $4.00/mile 
B)  $0.21/mile 
C)  $0.20/mile 
D)  $0.25/mile

Question 18

An asset was purchased for $12,000.The asset's estimated useful life was 5 years,and its residual value was $2,000.Straight-line depreciation was used.
-How much gain or loss is reported if the asset is sold for $9,000 at the end of the first year?

Accepted Answer

A)  $1,000 gain 
B)  $2,000 loss 
C)  No gain or loss 
D)  $1,000 loss 
A)  $1,000 gain 
B)  $2,000 loss 
C)  No gain or loss 
D)  $1,000 loss

Question 19

If an asset's physical condition deteriorates more rapidly than would be reflected by normal depreciation,that is referred to as:

Accepted Answer

A)  accelerated depreciation. 
B)  asset impairment. 
C)  asset disposal. 
D)  shrinkage. 
A)  accelerated depreciation. 
B)  asset impairment. 
C)  asset disposal. 
D)  shrinkage.

Question 20

When an asset is fully depreciated,no further depreciation expense is recorded.

Accepted Answer

A) True 
 B)False

A gain on disposal of an asset is recorded when cash received is less than book value.

An asset costs $80,000 and has a salvage value of $7,000.It has a four-year life.Using double-declining-balance depreciation,Year 1 depreciation would be:

Accumulated depletion is a contra asset account.

Which of the following asset categories would include fencing?

When a plant asset is sold,the first step is to bring the depreciation up to date.

Which of the following depreciation methods allocates a fixed amount of depreciation to miles driven,hours used,or some other measure of the asset's utilization?

A plant asset is sold for $1,000.The original cost was $9,000,salvage value was estimated at $200,and useful life was estimated at 12 years.At time of sale,accumulated depreciation was $8,500.The sale resulted in a loss of $500.

A mine is purchased for $4,000,000.There will be a salvage value of $300,000 when the land is restored after mining is completed.The mine has an estimated 250,000 tons of coal.What is the depletable cost per ton of coal?

To determine if there is a gain or loss on the sale of an asset,you must compare:

A loss on disposal of an asset is recorded when cash received is less than book value.

A company purchased equipment for $100,000 in 2012.The machine will be used for 10,000 hours and will have a residual value of $20,000.The equipment was used for 2,400 hours in 2012.How much depreciation will be recorded in 2012 if the company elects the units-of-production method?

The major ethical issues surrounding the recording of assets have to do with how assets are defined.

A loss occurs on the exchange of a plant asset if the market value of the new asset received is greater than the total amount given up in the exchange.

Which of the following accounting methods is the method used to compute depletion?

An asset was purchased for $12,000.The asset's estimated useful life was 5 years,and its residual value was $2,000.Straight-line depreciation was used. -How much gain or loss is reported if the asset is sold for $9,000 at the end of the first year?

If an asset's physical condition deteriorates more rapidly than would be reflected by normal depreciation,that is referred to as:

When an asset is fully depreciated,no further depreciation expense is recorded.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 9: Plant Assets and Intangibles

A gain on disposal of an asset is recorded when cash received is less than book value.

An asset costs $80,000 and has a salvage value of $7,000.It has a four-year life.Using double-declining-balance depreciation,Year 1 depreciation would be:

Accumulated depletion is a contra asset account.

Which of the following asset categories would include fencing?

When a plant asset is sold,the first step is to bring the depreciation up to date.

Which of the following depreciation methods allocates a fixed amount of depreciation to miles driven,hours used,or some other measure of the asset's utilization?

A plant asset is sold for $1,000.The original cost was $9,000,salvage value was estimated at $200,and useful life was estimated at 12 years.At time of sale,accumulated depreciation was $8,500.The sale resulted in a loss of $500.

A mine is purchased for $4,000,000.There will be a salvage value of $300,000 when the land is restored after mining is completed.The mine has an estimated 250,000 tons of coal.What is the depletable cost per ton of coal?

To determine if there is a gain or loss on the sale of an asset,you must compare:

A loss on disposal of an asset is recorded when cash received is less than book value.

A company purchased equipment for $100,000 in 2012.The machine will be used for 10,000 hours and will have a residual value of $20,000.The equipment was used for 2,400 hours in 2012.How much depreciation will be recorded in 2012 if the company elects the units-of-production method?

The major ethical issues surrounding the recording of assets have to do with how assets are defined.

A loss occurs on the exchange of a plant asset if the market value of the new asset received is greater than the total amount given up in the exchange.

Which of the following accounting methods is the method used to compute depletion?

An asset was purchased for $12,000.The asset's estimated useful life was 5 years,and its residual value was $2,000.Straight-line depreciation was used. -How much gain or loss is reported if the asset is sold for $9,000 at the end of the first year?

If an asset's physical condition deteriorates more rapidly than would be reflected by normal depreciation,that is referred to as:

When an asset is fully depreciated,no further depreciation expense is recorded.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters