Question 1

Costs incurred to keep assets in normal operating condition are called revenue expenditures.

Accepted Answer

A) True 
 B)False

Question 2

Blanton Company bought equipment on January 1,2013,with a cost of $160,000,an estimated residual value of $40,000,and an estimated life of 15 years.It was depreciated by the straight-line method for four years.Due to obsolescence,it was determined at the beginning of 2017 that the useful life should be shortened by three years and the residual value changed to zero.What is the accumulated depreciation at the end of 2016?

Accepted Answer

A) $42,667 
B) $32,000 
C) $40,000 
D) $8,000 
A) $42,667 
B) $32,000 
C) $40,000 
D) $8,000

Question 3

How are research and development costs reported in the financial statements? Why is this treatment required?

Accepted Answer

Research and development costs should be

Question 4

Yellow Dog Transit sold an old truck on December 31,2017,for $18,400 cash.The following data were available when the truck sold: ?
$$\begin{array} { l r } 
\text { Acquisition cost } & \$ 75,000 \
\text { Estimated residual value at time of acquisition } & 8,000 \
\text { Accumulated depreciation on December } 31,2017 \text {, after adjustment } & 53,600
\end{array}$$ When this transaction is recorded,it should include a(n)

Accepted Answer

A) Loss on Disposal account for $3,000. 
B) decrease of $21,400 to the Truck account. 
C) Gain on Disposal account for $3,000. 
D) Gain on Disposal account for $5,000. 
A) Loss on Disposal account for $3,000. 
B) decrease of $21,400 to the Truck account. 
C) Gain on Disposal account for $3,000. 
D) Gain on Disposal account for $5,000.

Question 5

The effect of recording depreciation for the year is a(n)

Accepted Answer

A) decrease in net income and no change in assets. 
B) decrease in assets but no change in owners' equity. 
C) increase in assets and an increase in net income. 
D) decrease in assets and a decrease in net income. 
A) decrease in net income and no change in assets. 
B) decrease in assets but no change in owners' equity. 
C) increase in assets and an increase in net income. 
D) decrease in assets and a decrease in net income.

Question 6

Newco Publishing Company purchased equipment at the beginning of 2017 for $200,000.The company decided to depreciate the equipment over an eight-year period using the straight-line method.The company estimated the equipment's residual value at $20,000.The adjustment for depreciation expense for 2017 will

Accepted Answer

A) increase Depreciation Expense and increase Accumulated Depreciation for $25,000. 
B) increase Accumulated Depreciation and decrease Equipment for $25,000. 
C) increase Depreciation Expense and decrease Equipment for $22,500. 
D) increase Depreciation Expense and increase Accumulated Depreciation for $22,500. 
A) increase Depreciation Expense and increase Accumulated Depreciation for $25,000. 
B) increase Accumulated Depreciation and decrease Equipment for $25,000. 
C) increase Depreciation Expense and decrease Equipment for $22,500. 
D) increase Depreciation Expense and increase Accumulated Depreciation for $22,500.

Question 7

Which of the following accounts would not be reported in the Property,Plant,and Equipment section of a balance sheet?

Accepted Answer

A) Accumulated Depreciation-Buildings 
B) Buildings 
C) Depreciation Expense-Buildings 
D) Land 
A) Accumulated Depreciation-Buildings 
B) Buildings 
C) Depreciation Expense-Buildings 
D) Land

Question 8

Mayflower Company had a machine with a cost of $123,000 and accumulated depreciation of $87,000 that was sold at for a gain of $5,000.What amount of cash was received from the sale?

Accepted Answer

A) $30,000 
B) $36,000 
C) $41,000 
D) $128,000 
A) $30,000 
B) $36,000 
C) $41,000 
D) $128,000

Question 9

For each of the following intangible assets,indicate the amount of amortization expense that should be recorded for the year 2017 and the amount of accumulated amortization on the balance sheet as of December 31,2017.
?
?
 $$\begin{array} { | l | l | l | l | } 
\hline &{ \text { Trademark } } &  { \text { Patent } } & { \text { Copyright } } \
\hline \text { Cost } & \$ 66,000 & \$ 75,000 & \$ 96,000 \
\hline \text { Date of purchase } & 1 / 1 / 10 & 1 / 1 / 12 & 1 / 1 / 15 \
\hline \text { Useful life } & \text { Indefinite } & 10 \text { years } & 20 \text { years } \
\hline \text { Legal life } & \text { Undefined } & \text { 20 years } & 50 \text { years } \
\hline \text { Method } & \text { Straight-line } & \text { Straight-line } & \text { Straight-line } \
\hline
\end{array}$$

Accepted Answer

?
 Trademark is not amortized because it

Question 10

Ramirez Stores purchased a trademark at the beginning of 2017 for $340,000.Economic benefits were expected for ten years,but the trademark's legal life was 20 years.Also,during 2017,Ramirez incurred research and development costs of $200,000.The book value of the trademarks at December 31,2017,is

Accepted Answer

A) $506,000. 
B) $306,000. 
C) $323,000. 
D) $486,000. 
A) $506,000. 
B) $306,000. 
C) $323,000. 
D) $486,000.

Question 11

Acquisition cost is also referred to as __________.

Accepted Answer

The answer of Acquisition cost is also referred to as...

Question 12

On the balance sheet,a company reports plant assets by subtracting residual value from the original cost of the plant asset.

Accepted Answer

A) True 
 B)False

Question 13

Assets classified as property,plant,and equipment are reported at

Accepted Answer

A) each asset's original cost less depreciation since acquisition. 
B) each asset's estimated salvage value at the balance sheet date. 
C) the estimated depreciable cost at the balance sheet date. 
D) each asset's estimated market value at the balance sheet date. 
A) each asset's original cost less depreciation since acquisition. 
B) each asset's estimated salvage value at the balance sheet date. 
C) the estimated depreciable cost at the balance sheet date. 
D) each asset's estimated market value at the balance sheet date.

Question 14

All of the following are included in the acquisition cost of property,plant,and equipment except

Accepted Answer

A) transportation costs. 
B) taxes on the purchase. 
C) installation costs. 
D) maintenance costs. 
A) transportation costs. 
B) taxes on the purchase. 
C) installation costs. 
D) maintenance costs.

Question 15

For each of the following sentences ,select the word or group of words that best completes the statement.
 $$\begin{array} { l l } 
\text { Patent } & \text { Copyright } \
\text { Goodwill } & \text { Revenue expenditure } \
\text { Natural resources } & \text { Research and development costs } \
\text { Trademark } & \text { Capital expenditure }
\end{array}$$
-__________ is an account that can only exist if one company purchases another business and the cost exceeds the fair market values of the identifiable net assets at the time acquired.

Accepted Answer

The answer of For each of the following sentences ,select...

Question 16

A statement of cash flows reports property,plant,and equipment transactions.
?
 A. What are the effects of acqui sitions of plant assets on the statement of cash flows?

B. In which section of the statement of cash flows are cash flows from sales of plant assets reported?

C. How is depreciation reported on the statement of cash flows? Why?

Accepted Answer

A. Additions are reported as investing a

Question 17

The Loss on Sale of Asset indicates the amount by which the asset's sales price is less than its book value.

Accepted Answer

A) True 
 B)False

Question 18

Net income on a cash basis is arrived at by adding depreciation and amortization back to accrual net income.

Accepted Answer

A) True 
 B)False

Question 19

Because plant and equipment are reported as long-term assets on the balance sheet,they have no impact on net income for the period until they are sold.

Accepted Answer

A) True 
 B)False

Question 20

On January 1, 2017, Grove City Corp. purchased a ship for $2,000,000. It has a ten-year useful life and a residual value of $50,000. The company uses the double-declining-balance method.
-If Grove City Corp.continues to use the ship in its eleventh year,what is the correct accounting procedure?

Accepted Answer

A) Take the asset off the books and record a gain on the disposal. 
B) Continue to depreciate it. 
C) The company may not use it any longer. 
D) No longer depreciate it but leave it on the records at its book value at the end of its useful life. 
A) Take the asset off the books and record a gain on the disposal. 
B) Continue to depreciate it. 
C) The company may not use it any longer. 
D) No longer depreciate it but leave it on the records at its book value at the end of its useful life.

Costs incurred to keep assets in normal operating condition are called revenue expenditures.

How are research and development costs reported in the financial statements? Why is this treatment required?

The effect of recording depreciation for the year is a(n)

Which of the following accounts would not be reported in the Property,Plant,and Equipment section of a balance sheet?

Mayflower Company had a machine with a cost of $123,000 and accumulated depreciation of $87,000 that was sold at for a gain of $5,000.What amount of cash was received from the sale?

Ramirez Stores purchased a trademark at the beginning of 2017 for $340,000.Economic benefits were expected for ten years,but the trademark's legal life was 20 years.Also,during 2017,Ramirez incurred research and development costs of $200,000.The book value of the trademarks at December 31,2017,is

Acquisition cost is also referred to as __________.

On the balance sheet,a company reports plant assets by subtracting residual value from the original cost of the plant asset.

Assets classified as property,plant,and equipment are reported at

All of the following are included in the acquisition cost of property,plant,and equipment except

The Loss on Sale of Asset indicates the amount by which the asset's sales price is less than its book value.

Net income on a cash basis is arrived at by adding depreciation and amortization back to accrual net income.

Because plant and equipment are reported as long-term assets on the balance sheet,they have no impact on net income for the period until they are sold.

On January 1, 2017, Grove City Corp. purchased a ship for $2,000,000. It has a ten-year useful life and a residual value of $50,000. The company uses the double-declining-balance method. -If Grove City Corp.continues to use the ship in its eleventh year,what is the correct accounting procedure?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 8: Operating Assets: Property, Plant, and Equipment, and Intangibles

Costs incurred to keep assets in normal operating condition are called revenue expenditures.

How are research and development costs reported in the financial statements? Why is this treatment required?

The effect of recording depreciation for the year is a(n)

Which of the following accounts would not be reported in the Property,Plant,and Equipment section of a balance sheet?

Mayflower Company had a machine with a cost of $123,000 and accumulated depreciation of $87,000 that was sold at for a gain of $5,000.What amount of cash was received from the sale?

Ramirez Stores purchased a trademark at the beginning of 2017 for $340,000.Economic benefits were expected for ten years,but the trademark's legal life was 20 years.Also,during 2017,Ramirez incurred research and development costs of $200,000.The book value of the trademarks at December 31,2017,is

Acquisition cost is also referred to as __________.

On the balance sheet,a company reports plant assets by subtracting residual value from the original cost of the plant asset.

Assets classified as property,plant,and equipment are reported at

All of the following are included in the acquisition cost of property,plant,and equipment except

The Loss on Sale of Asset indicates the amount by which the asset's sales price is less than its book value.

Net income on a cash basis is arrived at by adding depreciation and amortization back to accrual net income.

Because plant and equipment are reported as long-term assets on the balance sheet,they have no impact on net income for the period until they are sold.

On January 1, 2017, Grove City Corp. purchased a ship for $2,000,000. It has a ten-year useful life and a residual value of $50,000. The company uses the double-declining-balance method. -If Grove City Corp.continues to use the ship in its eleventh year,what is the correct accounting procedure?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters