Question 1

Costs and assessments that should be charged to the land account include:

Accepted Answer

A) streets. 
B) parks. 
C) flood prevention. 
D) All should be included. 
A) streets. 
B) parks. 
C) flood prevention. 
D) All should be included.

Question 2

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column 4 } \
\hline \text { Building } & & & & \
\hline
\end{array}$

Accepted Answer

The answer of For each of the following, identify in...

Question 3

Revenue expenditures include:

Accepted Answer

A) additions to existing plant assets. 
B) periodic normal maintenance costs. 
C) initial costs of acquiring plant assets. 
D) All of these answers are correct. 
A) additions to existing plant assets. 
B) periodic normal maintenance costs. 
C) initial costs of acquiring plant assets. 
D) All of these answers are correct.

Question 4

For tax purposes,the gain or loss on a traded asset is absorbed in the value of the new asset.

Accepted Answer

A) True 
 B)False

Question 5

For tax purposes,residential real property is depreciated using the straight-line method under MACRS.

Accepted Answer

A) True 
 B)False

Question 6

Assembly costs,and any other costs necessary to get a machine ready for operation,except for freight costs,would be added to the cost of the machine.

Accepted Answer

A) True 
 B)False

Question 7

A budgeted item such as a building is listed as a ________.

Accepted Answer

The answer of A budgeted item such as a building...

Question 8

Greetings Online disposed of a van that cost $22,000 with accumulated depreciation of $15,000.The journal entry would be to:

Accepted Answer

A) debit Accumulated Depreciation $15,000; credit Van $15,000. 
B) debit Accumulated Depreciation $15,000; debit Depreciation Expense $7,000; credit Van $22,000. 
C) debit Loss Disposal of Plant Asset $7,000; debit Accumulated Depreciation $15,000; credit Van $22,000. 
D) None of these answers are correct. 
A) debit Accumulated Depreciation $15,000; credit Van $15,000. 
B) debit Accumulated Depreciation $15,000; debit Depreciation Expense $7,000; credit Van $22,000. 
C) debit Loss Disposal of Plant Asset $7,000; debit Accumulated Depreciation $15,000; credit Van $22,000. 
D) None of these answers are correct.

Question 9

A computer server system,which had cost $210,000 and had accumulated depreciation of $147,000,was traded for a new system with a fair market value of $235,000.The old system and cash of $180,000 were given for the new system.Prepare the journal entry for the exchange of these similar assets assuming the income tax method is used to record the exchange.

Accepted Answer

The answer of A computer server system,which had cost $210,000...

Question 10

Expenditures for changing oil in a machine or repainting a car would be:

Accepted Answer

A) added to the cost of the asset. 
B) added as a capital expenditure. 
C) charged to an expense account. 
D) added as a betterment. 
A) added to the cost of the asset. 
B) added as a capital expenditure. 
C) charged to an expense account. 
D) added as a betterment.

Question 11

When equipment that is fully depreciated is discarded:

Accepted Answer

A) debit the original cost of the asset. 
B) credit the balance of Accumulated Depreciation. 
C) debit Accumulated Depreciation and credit Equipment. 
D) None of these answers are correct. 
A) debit the original cost of the asset. 
B) credit the balance of Accumulated Depreciation. 
C) debit Accumulated Depreciation and credit Equipment. 
D) None of these answers are correct.

Question 12

A company purchases a patent for $50,000.The patent will be amortized over 5 years.The entry to record the amortization in the first year is:

Accepted Answer

A) debit Patents $50,000; credit Cash $50,000. 
B) debit Amortization of Patents $10,000; credit Patents $10,000. 
C) debit Amortization of Patents $50,000; credit Patents $50,000. 
D) debit Patents $10,000; credit Amortization of Patents $10,000. 
A) debit Patents $50,000; credit Cash $50,000. 
B) debit Amortization of Patents $10,000; credit Patents $10,000. 
C) debit Amortization of Patents $50,000; credit Patents $50,000. 
D) debit Patents $10,000; credit Amortization of Patents $10,000.

Question 13

R.J.Berkshire incurred the following expenditures to buy new equipment:
 $\begin{array} { l l } 
\text { Invoice, subject to 3\% dircount } & \$ 25,000 \
\text { Installation cost } & 1,800 \
\text { Insurance for equipment after installation } & 500 \
\text { 5ales tax } & 1,500
\end{array}$ Discount taken
The amount the Equipment account will be debited for is ________.

Accepted Answer

$27,550 (2

Question 14

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column 4 } \
\hline \text { Land } & & & & \
\hline
\end{array}$

Accepted Answer

The answer of For each of the following, identify in...

Question 15

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $18,000,had a useful life of 3 years,no residual value,and an estimated total machine hours of 36,000? Production in year 1 was 10,000 hours.

Accepted Answer

A) $2,667 
B) $4,000 
C) $6,000 
D) $5,000 
A) $2,667 
B) $4,000 
C) $6,000 
D) $5,000

Question 16

A gain on the sale of a plant asset is listed as:

Accepted Answer

A) a liability on the balance sheet. 
B) an asset on the balance sheet. 
C) other expense on the income statement. 
D) other income on the income statement. 
A) a liability on the balance sheet. 
B) an asset on the balance sheet. 
C) other expense on the income statement. 
D) other income on the income statement.

Question 17

The entry to record the disposal of a laptop computer with a cost of $2,500 and an accumulated depreciation of $1,500 would be:

Accepted Answer

A) debit Depreciation Expense,$2,500; credit Equipment $2,500. 
B) debit Accumulated Depreciation $1,500; debit Loss on Disposal of an Asset $1,000; credit Equipment $2,500. 
C) debit Equipment $2,500; credit Accumulated Depreciation $2,500. 
D) debit Cash $2,500; credit Equipment $2,500. 
A) debit Depreciation Expense,$2,500; credit Equipment $2,500. 
B) debit Accumulated Depreciation $1,500; debit Loss on Disposal of an Asset $1,000; credit Equipment $2,500. 
C) debit Equipment $2,500; credit Accumulated Depreciation $2,500. 
D) debit Cash $2,500; credit Equipment $2,500.

Question 18

Lacy purchased equipment for $77,000 on January 1.Its residual value is $5,000 with a useful life of 9 years.The amount of depreciation expense in the first year under the straight-line method is:

Accepted Answer

A) $8,556. 
B) $8,000. 
C) $16,940. 
D) $15,840. 
A) $8,556. 
B) $8,000. 
C) $16,940. 
D) $15,840.

Question 19

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature (permanent/temporary).
-$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Gain from sale of } & & & & \
\text { plant asset }\
\hline 
\end{array}$

Accepted Answer

The answer of For each of the following, identify in...

Question 20

The amount to include in the entry to record the cost of a property,plant,and equipment asset would include:

Accepted Answer

A) acquisition cost. 
B) freight. 
C) installation. 
D) All of these answers are correct. 
A) acquisition cost. 
B) freight. 
C) installation. 
D) All of these answers are correct.

Exam 16: Accounting for Property, plant, equipment, and Intangible Assets

Costs and assessments that should be charged to the land account include:

Revenue expenditures include:

For tax purposes,the gain or loss on a traded asset is absorbed in the value of the new asset.

For tax purposes,residential real property is depreciated using the straight-line method under MACRS.

Assembly costs,and any other costs necessary to get a machine ready for operation,except for freight costs,would be added to the cost of the machine.

A budgeted item such as a building is listed as a ________.

Greetings Online disposed of a van that cost $22,000 with accumulated depreciation of $15,000.The journal entry would be to:

Expenditures for changing oil in a machine or repainting a car would be:

When equipment that is fully depreciated is discarded:

A company purchases a patent for $50,000.The patent will be amortized over 5 years.The entry to record the amortization in the first year is:

R.J.Berkshire incurred the following expenditures to buy new equipment: Invoice, subject to 3\% dircount \ 25,000 Installation cost 1,800 Insurance for equipment after installation 500 5ales tax 1,500 Discount taken The amount the Equipment account will be debited for is ________.

What would be the depreciation expense in year 1,using units-of-production,for a molding machine that cost $18,000,had a useful life of 3 years,no residual value,and an estimated total machine hours of 36,000? Production in year 1 was 10,000 hours.

A gain on the sale of a plant asset is listed as:

The entry to record the disposal of a laptop computer with a cost of $2,500 and an accumulated depreciation of $1,500 would be:

Lacy purchased equipment for $77,000 on January 1.Its residual value is $5,000 with a useful life of 9 years.The amount of depreciation expense in the first year under the straight-line method is:

The amount to include in the entry to record the cost of a property,plant,and equipment asset would include:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, dividends, treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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