Question 1

The type of intangible asset related to the rights of original music and media is:

Accepted Answer

A)  goodwill. 
B)  a trademark. 
C)  a copyright. 
D)  a patent. 
A)  goodwill. 
B)  a trademark. 
C)  a copyright. 
D)  a patent.

Question 2

Kelly Petroleum Products owns furniture that was purchased for $19,600.Accumulated depreciation is $17,300.The furniture was sold for $3,800.Which of the following is the correct entry to record the transaction?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accumulated depreciation } & 17,300 & \
\hline \text { Cash } & 3,800 & \
\hline \text { Gain on sale } & & 1,500 \
\hline \text { Furniture } & & 19,600 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | l | } 
\hline \text { Accumulated depreciation } & 17,300 & \
\hline \text { Cash } & 3,800 & \
\hline \text { Furniture } & & 31,100 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Furniture } & 19,600 & \
\hline \text { Gain on sale } & 3,800 & \
\hline \text { Cash } & & 2,700 \
\hline \text { Accumulated depreciation } & & 17,300 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Furniture } & 19,600 & \
\hline \text { Cash } & 2,700 & \
\hline \text { Gain on sale } & & 5,000 \
\hline \text { Accumulated depreciation } & & 17,300 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accumulated depreciation } & 17,300 & \
\hline \text { Cash } & 3,800 & \
\hline \text { Gain on sale } & & 1,500 \
\hline \text { Furniture } & & 19,600 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | l | } 
\hline \text { Accumulated depreciation } & 17,300 & \
\hline \text { Cash } & 3,800 & \
\hline \text { Furniture } & & 31,100 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Furniture } & 19,600 & \
\hline \text { Gain on sale } & 3,800 & \
\hline \text { Cash } & & 2,700 \
\hline \text { Accumulated depreciation } & & 17,300 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Furniture } & 19,600 & \
\hline \text { Cash } & 2,700 & \
\hline \text { Gain on sale } & & 5,000 \
\hline \text { Accumulated depreciation } & & 17,300 \
\hline
\end{array}$$

Question 3

One of the key concepts surrounding the definition of an asset is that it must provide future benefit.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is NOT considered a plant asset?

Accepted Answer

A)  Copyright 
B)  Building 
C)  Land 
D)  Equipment 
A)  Copyright 
B)  Building 
C)  Land 
D)  Equipment

Question 5

Many companies have gotten into trouble by recording costs as expenses,rather than capitalizing them.

Accepted Answer

A) True 
 B)False

Question 6

On September 1,2012,Algernon Company sold a truck for $15,000 cash.The truck was originally purchased for $40,000,had an estimated salvage value of $4,000 and an estimated life of 6 years.Algernon had recorded depreciation of $30,000 through the end of 2011 using the straight-line method.Algernon had to update the depreciation prior to sale.After updating the depreciation,how much was the total accumulated depreciation on the truck?

Accepted Answer

A)  $34,250 
B)  $34,440 
C)  $36,000 
D)  $34,000 
A)  $34,250 
B)  $34,440 
C)  $36,000 
D)  $34,000

Question 7

Azimuth Company purchases a small business for $500,000.The market value of the business's assets are $850,000,and the market value of the liabilities are $400,000.How much goodwill should Azimuth record?

Accepted Answer

A)  None 
B)  $500,000 
C)  $450,000 
D)  $50,000 
A)  None 
B)  $500,000 
C)  $450,000 
D)  $50,000

Question 8

If the sales price of a plant asset is lower than the book value,there will be a loss on sale.

Accepted Answer

A) True 
 B)False

Question 9

Hastings Company has purchased a group of assets for $350,000.The assets and their market values are listed as follows: $$\begin{array} { | l | r | } 
\hline \text { Land } & \$ 125,000 \
\hline \text { Equipment } & 75,000 \
\hline \text { Building } & 200,000 \
\hline
\end{array}$$ Which of the following amounts would be debited to the Land account?

Accepted Answer

A)  $125,000 
B)  $109,375 
C)  $65,625 
D)  $175,000 
A)  $125,000 
B)  $109,375 
C)  $65,625 
D)  $175,000

Question 10

Treating a cost which should be an expense as a capital expenditure will make a company's net income higher.

Accepted Answer

A) True 
 B)False

Question 11

An asset has a life of 3 years.It cost $90,000 and has an expected salvage value of $15,000.Using straight-line depreciation,what is the depreciation expense each of the three years?

Accepted Answer

A)  $30,000 
B)  $35,000 
C)  $25,000 
D)  $45,000 
A)  $30,000 
B)  $35,000 
C)  $25,000 
D)  $45,000

Question 12

In 2012,Azimuth Company purchased a small business for $500,000.The market value of the business's assets were $850,000,and the market value of the liabilities were $400,000.Azimuth recorded goodwill of $50,000 at time of acquisition.At the end of 2013,they measured the goodwill and found it had a remaining value of only $20,000.What will Azimuth have to do at year-end 2013?

Accepted Answer

A)  Record a loss on sale of assets. 
B)  Record a loss on goodwill. 
C)  Record accumulated depletion. 
D)  Record a gain in goodwill. 
A)  Record a loss on sale of assets. 
B)  Record a loss on goodwill. 
C)  Record accumulated depletion. 
D)  Record a gain in goodwill.

Question 13

Which of the following is included in the cost of land?

Accepted Answer

A)  The cost of fencing 
B)  The cost of paving 
C)  The cost of clearing the land 
D)  The cost of outdoor lighting 
A)  The cost of fencing 
B)  The cost of paving 
C)  The cost of clearing the land 
D)  The cost of outdoor lighting

Question 14

On January 1,2013,Zane Manufacturing Company purchased a machine for $40,000.The company expects to use the machine a total of 24,000 hours over the next 6 years.The estimated sales price of the machine at the end of 6 years is $4,000.The company used the machine 8,000 hours in 2013 and 12,000 in 2014.
- What is depreciation expense for 2013 if the company uses double-declining-balance depreciation?

Accepted Answer

A)  $6,667 
B)  $6,000 
C)  $13,333 
D)  $12,000 
A)  $6,667 
B)  $6,000 
C)  $13,333 
D)  $12,000

Question 15

When a plant asset is sold,if the book value is lower than the sales price,there will be a loss on sale.

Accepted Answer

A) True 
 B)False

Question 16

Charterhouse Services purchased a van on January 1,2012,for $56,000.It has an estimated life of 5 years,and an estimated salvage value of $6,000.Dawson uses straight-line depreciation.At the end of 2014,Charterhouse revised the estimated life of the asset from 5 years to 8 years.How much was the depreciation expense in the year 2015?

Accepted Answer

A)  $5,000 
B)  $4,000 
C)  $6,000 
D)  $5,600 
A)  $5,000 
B)  $4,000 
C)  $6,000 
D)  $5,600

Question 17

Which of the following accounting principles requires depreciation?

Accepted Answer

A)  The revenue recognition principle 
B)  The matching principle 
C)  The reliability principle 
D)  The entity concept 
A)  The revenue recognition principle 
B)  The matching principle 
C)  The reliability principle 
D)  The entity concept

Question 18

A company's accountant expenses a payment that should be capitalized.Which of the following is TRUE?

Accepted Answer

A)  Net income is understated. 
B)  Liabilities are overstated. 
C)  Revenue is overstated. 
D)  Assets are overstated. 
A)  Net income is understated. 
B)  Liabilities are overstated. 
C)  Revenue is overstated. 
D)  Assets are overstated.

Question 19

Which of the following items should be depreciated?

Accepted Answer

A)  Tangible property, plant, and equipment, other than land 
B)  Intangible property 
C)  Land 
D)  Natural resources 
A)  Tangible property, plant, and equipment, other than land 
B)  Intangible property 
C)  Land 
D)  Natural resources

Question 20

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 $4,500 at the end of the third year?

Accepted Answer

A)  $1,500 gain 
B)  $2,000 loss 
C)  No gain or loss 
D)  $1,500 loss 
A)  $1,500 gain 
B)  $2,000 loss 
C)  No gain or loss 
D)  $1,500 loss

The type of intangible asset related to the rights of original music and media is:

Kelly Petroleum Products owns furniture that was purchased for $19,600.Accumulated depreciation is $17,300.The furniture was sold for $3,800.Which of the following is the correct entry to record the transaction?

One of the key concepts surrounding the definition of an asset is that it must provide future benefit.

Which of the following is NOT considered a plant asset?

Many companies have gotten into trouble by recording costs as expenses,rather than capitalizing them.

Azimuth Company purchases a small business for $500,000.The market value of the business's assets are $850,000,and the market value of the liabilities are $400,000.How much goodwill should Azimuth record?

If the sales price of a plant asset is lower than the book value,there will be a loss on sale.

Hastings Company has purchased a group of assets for $350,000.The assets and their market values are listed as follows: Land \ 125,000 Equipment 75,000 Building 200,000 Which of the following amounts would be debited to the Land account?

Treating a cost which should be an expense as a capital expenditure will make a company's net income higher.

An asset has a life of 3 years.It cost $90,000 and has an expected salvage value of $15,000.Using straight-line depreciation,what is the depreciation expense each of the three years?

Which of the following is included in the cost of land?

When a plant asset is sold,if the book value is lower than the sales price,there will be a loss on sale.

Which of the following accounting principles requires depreciation?

A company's accountant expenses a payment that should be capitalized.Which of the following is TRUE?

Which of the following items should be depreciated?

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 $4,500 at the end of the third year?

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

The type of intangible asset related to the rights of original music and media is:

Kelly Petroleum Products owns furniture that was purchased for $19,600.Accumulated depreciation is $17,300.The furniture was sold for $3,800.Which of the following is the correct entry to record the transaction?

One of the key concepts surrounding the definition of an asset is that it must provide future benefit.

Which of the following is NOT considered a plant asset?

Many companies have gotten into trouble by recording costs as expenses,rather than capitalizing them.

Azimuth Company purchases a small business for $500,000.The market value of the business's assets are $850,000,and the market value of the liabilities are $400,000.How much goodwill should Azimuth record?

If the sales price of a plant asset is lower than the book value,there will be a loss on sale.

Hastings Company has purchased a group of assets for $350,000.The assets and their market values are listed as follows: Land \ 125,000 Equipment 75,000 Building 200,000 Which of the following amounts would be debited to the Land account?

Treating a cost which should be an expense as a capital expenditure will make a company's net income higher.

An asset has a life of 3 years.It cost $90,000 and has an expected salvage value of $15,000.Using straight-line depreciation,what is the depreciation expense each of the three years?

Which of the following is included in the cost of land?

When a plant asset is sold,if the book value is lower than the sales price,there will be a loss on sale.

Which of the following accounting principles requires depreciation?

A company's accountant expenses a payment that should be capitalized.Which of the following is TRUE?

Which of the following items should be depreciated?

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 $4,500 at the end of the third year?

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