Exam 11: Long Term Assets

The dolphin used to identify the publisher of your accounting textbook is an example of a

Which of the following would not be considered a capital expenditure?

A leasehold is a payment

The entire cost of developing computer software should be capitalized and amortized over the software's useful life.

Driveways and parking lots are properly included in the Land account because they are not subject to depreciation.

The cost of a sewage system should be included in the Land Improvements account.

Which of the following accounting principles best justifies accelerated depreciation accounting?

A revenue expenditure results in the immediate recognition of an expense.

A copyright is obtained for what becomes a very successful book. The publisher expects the book to generate sales for ten years. The copyright should be

The expensing of a long-lived asset such as a wastebasket is justified by which of the following accounting rules or principles?

Office furniture was purchased for $57,000. It had an estimated residual value of $7,000 and has a current carrying value of $9,000. Its depreciable cost must have been

The production method is an accelerated method of depreciation.

Normally, depreciation calculations are based on the exact number of days the asset is held during the period.

An asset was purchased for $200,000. It had an estimated residual value of $40,000 and an estimated useful life of ten years. After four years of use, the estimated residual value is revised to $28,000. Assuming straight-line depreciation, depreciation expense in year 5 of use would be

In 2010, Minneapolis Mining purchased a mineral deposit for $12,000,000. It is estimated that 15,000,000 tons can be extracted from the mine. Calculate depletion expense during 2010 when 700,000 tons were extracted and sold.

Oren Company's air-conditioning system has just completed the eighth year of an estimated ten-year life. The system cost $60,000 and now has accumulated depreciation of $48,000. At the beginning of the ninth year, the company expects to spend $16,000 on a complete renovation of the system and expects the total life of the system to be fifteen years. Neither the capacity of the system nor the residual value was increased. The company uses the straight-line method to determine depreciation. Determine the following: (a) the account debited for the cost of renovation, (b) the carrying value of the system after renovation, and (c) the depreciation expense for the ninth year.

Estimated residual value is ignored entirely under which of the following methods of depreciation?

When calculating a partial year's depreciation, the length of time an asset has been owned usually is rounded to the nearest month. This rounding practice is justified by the principle or rule of

Which of the following terms does not mean the same as the others?

For tax purposes, small businesses may expense the first $250,000 of equipment expenditures, rather than having to allocate their costs over a number of years.