Exam 16: Accounting for Property, Plant, Equipment, and Intangible Assets

The cost of an asset less its accumulated depreciation is called:

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

Which depreciation method uses twice the straight-line rate?

The process of writing off an intangible asset is:

The entry to record the payment of an extraordinary repair of $5,000 that will extend the life of the machine 5 years, when the machine cost $30,000, and has accumulated depreciation of $26,000, is to:

The write-off of intangible assets is called:

Patents, copyrights, and franchises are intangible assets with the same number of years of useful life.

A capital expenditure is recorded in an asset account.

Amortization of a patent was ignored. This error would cause:

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). -

Mount Company purchased a machine at an invoice cost of $21,000 subject to terms of 3/10, n/30. The discount was taken. Additional costs were installation, $1200; insurance on the machine after it was in operation, $370. The total cost to be added to the machinery account is:

The cost of a plant asset did not include installation costs that were expensed. This error would cause:

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). -

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

Payments for ordinary maintenance of an asset are called ________.

Gains incurred in selling or trading assets are always recognized.

The three categories of writing off plant assets, natural resources, and intangible assets are ________, ________, and ________.

Double-declining-balance method is used in the first year when straight-line should be used. This error would cause:

Net income is affected by the depreciation method used.

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). -