Question 1

The exclusive right to produce and sell a manuscript is called a:

Accepted Answer

A) copyright. 
B) franchise. 
C) patent. 
D) goodwill. 
A) copyright. 
B) franchise. 
C) patent. 
D) goodwill.

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).
-$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Land } & & & & \
 \begin{array} { l } 
\text { improvements }
\end{array} & & & \
\hline
\end{array}$

Accepted Answer

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

Question 3

The portion of an intangible asset's cost that is recognized as an expense is ________.

Accepted Answer

The answer of The portion of an intangible asset's cost...

Question 4

Payments for ordinary maintenance of an asset are called ________.

Accepted Answer

revenue ex

Question 5

The units-of-production method does not take into account the passage of time.

Accepted Answer

A) True 
 B)False

Question 6

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).
-$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Franchise } & & & & \
\hline
\end{array}$

Accepted Answer

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

Question 7

What would the book value be at the end of year 3 for a computer system using the straight-line method when cost is $5,000,residual value is $1,000,and the expected life is 4 years?

Accepted Answer

A) $2,000 
B) $1,500 
C) $1,250 
D) $1,000 
A) $2,000 
B) $1,500 
C) $1,250 
D) $1,000

Question 8

What would the accumulated depreciation at the end of year 3 for a computer system using the straight-line method when cost is $5,000,residual value is $1,000,and the expected life is 4 years?

Accepted Answer

A) $1,000 
B) $1,250 
C) $3,000 
D) $3,750 
A) $1,000 
B) $1,250 
C) $3,000 
D) $3,750

Question 9

A company purchased new computer equipment from a local vendor.An employee offered to pick up the equipment and received a speeding ticket on his way back to the office.The cost of the speeding ticket should be charged to the cost of the equipment.

Accepted Answer

A) True 
 B)False

Question 10

A piece of equipment is purchased for $78,000 on January 1.It has a 5-year life and a salvage value of $8,000.Compute the annual depreciation expense using the double-declining-balance method for all 5 years.

Accepted Answer

Year 1: $31,200 (78000 × .4)

Question 11

The process of writing off an intangible asset is:

Accepted Answer

A) depreciation. 
B) depletion. 
C) amortization. 
D) None of these answers are correct. 
A) depreciation. 
B) depletion. 
C) amortization. 
D) None of these answers are correct.

Question 12

A gain on the sale of an asset occurs when:

Accepted Answer

A) the cash received is less than the book value of the asset. 
B) the book value is equal to the cost of the asset,and the cash received is less than the cost of the asset. 
C) the cash received is greater than the book value of the asset. 
D) None of these answers are correct. 
A) the cash received is less than the book value of the asset. 
B) the book value is equal to the cost of the asset,and the cash received is less than the cost of the asset. 
C) the cash received is greater than the book value of the asset. 
D) None of these answers are correct.

Question 13

Under MACRS,the salvage value is:

Accepted Answer

A) added to the straight-line depreciation. 
B) subtracted from the cost of the asset. 
C) ignored. 
D) added to the cost of the asset. 
A) added to the straight-line depreciation. 
B) subtracted from the cost of the asset. 
C) ignored. 
D) added to the cost of the asset.

Question 14

Which depreciation method uses the current book value in determining depreciation?

Accepted Answer

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

Question 15

Tangible assets include:

Accepted Answer

A) patents. 
B) cash. 
C) trademarks. 
D) copyrights. 
A) patents. 
B) cash. 
C) trademarks. 
D) copyrights.

Question 16

Salvage value was ignored when originally calculating the units-of-production depreciation.This error would cause:

Accepted Answer

A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be overstated. 
D) None of these are correct. 
A) the period's net income to be overstated. 
B) the period's net income to be understated. 
C) the period end assets to be overstated. 
D) None of these are correct.

Question 17

The Gain on Disposal account is classified as another revenue account.

Accepted Answer

A) True 
 B)False

Question 18

Intellectual property assets are:

Accepted Answer

A) depreciated. 
B) depleted. 
C) amortized. 
D) expensed. 
A) depreciated. 
B) depleted. 
C) amortized. 
D) expensed.

Question 19

Land is depreciated based on the MACRS schedule.

Accepted Answer

A) True 
 B)False

Question 20

Tender Years purchased a new van on January 1,200x,for $40,000.The life of the van is 4 years or 100,000 miles,with an estimated residual value of $5,000.During the first year,the van was driven 20,000 miles.Compute the depreciation expense for the first year applying each of the methods below.
a)________ Straight-line
b)________ Units-of-production
c)________ Double-declining-balance

Accepted Answer

a)$8,750

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

The exclusive right to produce and sell a manuscript is called a:

The portion of an intangible asset's cost that is recognized as an expense is ________.

Payments for ordinary maintenance of an asset are called ________.

The units-of-production method does not take into account the passage of time.

What would the book value be at the end of year 3 for a computer system using the straight-line method when cost is $5,000,residual value is $1,000,and the expected life is 4 years?

What would the accumulated depreciation at the end of year 3 for a computer system using the straight-line method when cost is $5,000,residual value is $1,000,and the expected life is 4 years?

A company purchased new computer equipment from a local vendor.An employee offered to pick up the equipment and received a speeding ticket on his way back to the office.The cost of the speeding ticket should be charged to the cost of the equipment.

A piece of equipment is purchased for $78,000 on January 1.It has a 5-year life and a salvage value of $8,000.Compute the annual depreciation expense using the double-declining-balance method for all 5 years.

The process of writing off an intangible asset is:

A gain on the sale of an asset occurs when:

Under MACRS,the salvage value is:

Which depreciation method uses the current book value in determining depreciation?

Tangible assets include:

Salvage value was ignored when originally calculating the units-of-production depreciation.This error would cause:

The Gain on Disposal account is classified as another revenue account.

Intellectual property assets are:

Land is depreciated based on the MACRS schedule.

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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