Question 1

Residual value is also known as depreciable cost.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true of goodwill?

Accepted Answer

A) Goodwill must be capitalized when acquired and amortized over seven years or less. 
B) Both created and acquired goodwill must be recorded in the books. 
C) Goodwill must be expensed when acquired. 
D) Goodwill is not amortized. 
A) Goodwill must be capitalized when acquired and amortized over seven years or less. 
B) Both created and acquired goodwill must be recorded in the books. 
C) Goodwill must be expensed when acquired. 
D) Goodwill is not amortized.

Question 3

Amortization is the process by which businesses spread the allocation of an intangible asset's cost over its useful life.

Accepted Answer

A) True 
 B)False

Question 4

On January 1,2016,Amethyst Manufacturing Corporation purchased a machine for $40,000,000.The corporation expects to use the machine for 24,000 hours over the next six years.The estimated residual value of the machine at the end of the sixth year is $40,000.The schedule of usage of the machine is below.
   
Prepare the depreciation schedule using the units-of-production method of depreciation.

Accepted Answer

@#IMG-DLM& Depreciation per ho

Question 5

An oil well cost $2,090,000 and is calculated to hold 320,000 barrels of oil.There is no residual value.Which journal entry is needed to record the expense for the extraction of 54,000 barrels of oil during the year? All 54,000 barrels were sold ding the year.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. )

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 6

Blake,Inc.purchased a van on January 1,2015,for $800,000.Estimated life of the van was five years,and its estimated residual value was $90,000.Blake uses the straight-line method of depreciation.Give the journal entry to record the purchase of van for cash.

Accepted Answer

The answer of Blake,Inc.purchased a van on January 1,2015,for $800,000.Estimated...

Question 7

A fully depreciated asset that is still in service is not reported as an asset on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

According to Generally Accepted Accounting Principles,goodwill must be amortized.

Accepted Answer

A) True 
 B)False

Question 9

An asset is considered to be obsolete ________.

Accepted Answer

A) only when it wears out 
B) only at the end of its useful life 
C) when it is fully depreciated 
D) when a newer asset can perform the job more efficiently than the old asset can 
A) only when it wears out 
B) only at the end of its useful life 
C) when it is fully depreciated 
D) when a newer asset can perform the job more efficiently than the old asset can

Question 10

Which of the following requires businesses to record depreciation?

Accepted Answer

A) revenue recognition principle 
B) matching principle 
C) cost principle 
D) going concern principle 
A) revenue recognition principle 
B) matching principle 
C) cost principle 
D) going concern principle

Question 11

The cost of a building depends on whether the company is constructing the building or is acquiring an existing one.

Accepted Answer

A) True 
 B)False

Question 12

Gideon Electronics paid $200,000 to acquire Tabletz,Inc. ,an electronic gadget-advertising website.At the time of the acquisition,Tabletz's balance sheet reported total assets of $200,000 and liabilities of $100,000.The fair market value of Tabletz's assets was $200,000.The fair market value of its liabilities was $100,000.Journalize the acquisition of Tabletz in the books of Gideon Electronics.

Accepted Answer

The answer of Gideon Electronics paid $200,000 to acquire Tabletz,Inc....

Question 13

Houlihan,Inc.purchased a van on January 1,2016,for $800,000.Estimated life of the van was five years,and its estimated residual value was $90,000.Houlihan uses the straight-line method of depreciation.Give the journal entry to record the depreciation expense for 2016 on the van.

Accepted Answer

@#IMG-DLM&
Explanation:
Depreciation per

Question 14

Metro Auto Parts recently traded in store fixtures.The exchange had commercial substance.The old fixtures had a cost of $48,000 and accumulated depreciation of $16,000.Metro paid $106,000 for the new store fixtures.These new fixtures had a market value of $119,000.There is a loss of $19,000 on this exchange.

Accepted Answer

A) True 
 B)False

Question 15

The double-declining-balance method is an accelerated method of depreciation.

Accepted Answer

A) True 
 B)False

Question 16

General,Inc.purchased a van on May 1,2016,for $800,000.Estimated life of the van was five years,and its estimated residual value was $80,000.General uses the straight-line method of depreciation.Prepare the journal entry to record the depreciation expense for 2016 on the van.

Accepted Answer

@#IMG-DLM&
Explanation:
Depreciation per

Question 17

Regardless of the type of plant asset disposal,the first step is to bring the depreciation up to date.

Accepted Answer

A) True 
 B)False

Question 18

If a plant asset is sold for more than its book value,a loss is recorded.

Accepted Answer

A) True 
 B)False

Question 19

Repair work that generates a capital expenditure because it extends a plant asset's useful life past the normal expected life is known as an extraordinary repair.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements about franchises is correct?

Accepted Answer

A) Franchises are privileges granted by a government to use public property in performing services. 
B) The acquisition cost of a franchise is always amortized over its legal life. 
C) Franchises are privileges granted by a business to sell goods or services under qualified conditions. 
D) The acquisition cost of a franchise cannot be amortized because its useful life cannot be determined. 
A) Franchises are privileges granted by a government to use public property in performing services. 
B) The acquisition cost of a franchise is always amortized over its legal life. 
C) Franchises are privileges granted by a business to sell goods or services under qualified conditions. 
D) The acquisition cost of a franchise cannot be amortized because its useful life cannot be determined.

Exam 10: Plant Assets, natural Resources, and Intangibles

Residual value is also known as depreciable cost.

Which of the following is true of goodwill?

Amortization is the process by which businesses spread the allocation of an intangible asset's cost over its useful life.

Blake,Inc.purchased a van on January 1,2015,for $800,000.Estimated life of the van was five years,and its estimated residual value was $90,000.Blake uses the straight-line method of depreciation.Give the journal entry to record the purchase of van for cash.

A fully depreciated asset that is still in service is not reported as an asset on the balance sheet.

According to Generally Accepted Accounting Principles,goodwill must be amortized.

An asset is considered to be obsolete ________.

Which of the following requires businesses to record depreciation?

The cost of a building depends on whether the company is constructing the building or is acquiring an existing one.

Houlihan,Inc.purchased a van on January 1,2016,for $800,000.Estimated life of the van was five years,and its estimated residual value was $90,000.Houlihan uses the straight-line method of depreciation.Give the journal entry to record the depreciation expense for 2016 on the van.

The double-declining-balance method is an accelerated method of depreciation.

General,Inc.purchased a van on May 1,2016,for $800,000.Estimated life of the van was five years,and its estimated residual value was $80,000.General uses the straight-line method of depreciation.Prepare the journal entry to record the depreciation expense for 2016 on the van.

Regardless of the type of plant asset disposal,the first step is to bring the depreciation up to date.

If a plant asset is sold for more than its book value,a loss is recorded.

Repair work that generates a capital expenditure because it extends a plant asset's useful life past the normal expected life is known as an extraordinary repair.

Which of the following statements about franchises is correct?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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