Question 1

Under the double-declining-balance method of depreciation,residual value is initially ignored.

Accepted Answer

A) True 
 B)False  True

Question 2

Natural resources are reported in the Intangible Assets section of the balance sheet.

Accepted Answer

A) True 
 B)False  False

Question 3

A company incurred the following costs:   What is the cost of the land?

Accepted Answer

A) $270,000 
B) $296,000 
C) $356,000 
D) $294,000 
A) $270,000 
B) $296,000 
C) $356,000 
D) $294,000 B

Question 4

A company incurred the following costs for a new delivery truck:   What is the cost of the delivery truck?

Accepted Answer

A) $118,600 
B) $120,600 
C) $123,600 
D) $127,700 
A) $118,600 
B) $120,600 
C) $123,600 
D) $127,700

Question 5

Jimmy Company leased a delivery van for payments of $11,000 per year for three years.In addition,Jimmy Company also paid $1,700 for new larger windows in the van and spent $5,400 for special storage racks for the van.Leasehold Improvements equal:

Accepted Answer

A) $11,000. 
B) $1,700. 
C) $5,400. 
D) $7,100. 
A) $11,000. 
B) $1,700. 
C) $5,400. 
D) $7,100.

Question 6

WorldCom's fraudulent scheme of capitalizing telephone line costs instead of expensing them was discovered by:

Accepted Answer

A) external auditors. 
B) astute investors. 
C) U.S.Securities and Exchange Commission. 
D) internal auditors. 
A) external auditors. 
B) astute investors. 
C) U.S.Securities and Exchange Commission. 
D) internal auditors.

Question 7

A distinctive identification of a product or a service is a:

Accepted Answer

A) patent. 
B) trademark. 
C) copyright. 
D) license. 
A) patent. 
B) trademark. 
C) copyright. 
D) license.

Question 8

First Company purchased Second Company for $20,000,000 cash.At the time of purchase,Second Company's assets had a market value of $30,000,000 and the liabilities had a market value of $14,000,000.At the time of purchase,Second Company's assets had a book value of $14,000,000 and the liabilities had a book value of $7,000,000.What amount of goodwill is recorded?

Accepted Answer

A) $4,000,000 
B) $16,000,000 
C) $10,000,000 
D) $14,000,000 
A) $4,000,000 
B) $16,000,000 
C) $10,000,000 
D) $14,000,000

Question 9

The journal entry to amortize a copyright affects the accounting equation by:

Accepted Answer

A) increasing assets and stockholders' equity. 
B) decreasing assets and stockholders' equity. 
C) increasing assets and decreasing stockholders' equity. 
D) decreasing assets and increasing stockholders' equity. 
A) increasing assets and stockholders' equity. 
B) decreasing assets and stockholders' equity. 
C) increasing assets and decreasing stockholders' equity. 
D) decreasing assets and increasing stockholders' equity.

Question 10

A machine is purchased for $80,000.The transportation cost from the seller was $3,000,installation costs were $2,000 and taxes on the purchase price were $700.Testing runs of the new machine cost $3,000.What is the cost of the machine?

Accepted Answer

A) $80,000 
B) $85,000 
C) $85,700 
D) $88,700 
A) $80,000 
B) $85,000 
C) $85,700 
D) $88,700

Question 11

A depreciation method in which an equal amount of depreciation expense is assigned to each year of the asset's use is the:

Accepted Answer

A) units-of-production method. 
B) straight-line method. 
C) accelerated depreciation method. 
D) estimated residual value method. 
A) units-of-production method. 
B) straight-line method. 
C) accelerated depreciation method. 
D) estimated residual value method.

Question 12

On January 2,2019,Kornis Corporation acquired equipment for $1,500,000.The estimated life of the equipment is 5 years or 90,000 hours.The estimated residual value is $50,000.What is the balance in Accumulated Depreciation on December 31,2019,if Kornis Corporation uses the double-declining-balance method of depreciation?

Accepted Answer

A) $290,000 
B) $300,000 
C) $580,000 
D) $600,000 
A) $290,000 
B) $300,000 
C) $580,000 
D) $600,000

Question 13

Gengler Company acquired three pieces of equipment for $1,700,000.Equipment #1 is appraised at $470,000,equipment #2 is appraised at $630,000 and equipment #3 is appraised for $640,000.The cost of equipment #1 is: (Do not round any intermediary calculations,and round your final answer to the nearest dollar. )

Accepted Answer

A) $129,941. 
B) $126,954. 
C) $459,195. 
D) $470,000. 
A) $129,941. 
B) $126,954. 
C) $459,195. 
D) $470,000.

Question 14

Leasehold improvements are not subject to depreciation or amortization.

Accepted Answer

A) True 
 B)False

Question 15

Marjorie Corporation acquired a building on January 1,2019,for $800,000.The building had an estimated useful life of 20 years and an estimated salvage value of $29,000.On January 1,2021,Marjorie Corporation determined that the building could only be used for another 10 years and there would be no salvage value.Compute depreciation expense for the year ending December 31,2021,if Marjorie Corporation uses straight-line depreciation.

Accepted Answer

A) $38,550 
B) $115,650 
C) $72,290 
D) $77,100 
A) $38,550 
B) $115,650 
C) $72,290 
D) $77,100

Question 16

When computing depreciation using the units-of-production method:

Accepted Answer

A) a variable amount of depreciation is assigned to each unit of output. 
B) a fixed amount of depreciation is assigned to each unit of output. 
C) the depreciation expense depends directly on the amount of output or usage. 
D) B and C. 
A) a variable amount of depreciation is assigned to each unit of output. 
B) a fixed amount of depreciation is assigned to each unit of output. 
C) the depreciation expense depends directly on the amount of output or usage. 
D) B and C.

Question 17

Land,a building and equipment are acquired for a lump sum of $800,000.The market values of the land,building and equipment are $400,000,$900,000 and $300,000,respectively.What is the cost assigned to the equipment? (Do not round any intermediary calculations,and round your final answer to the nearest dollar. )

Accepted Answer

A) $0 
B) $150,000 
C) $300,000 
D) $800,000 
A) $0 
B) $150,000 
C) $300,000 
D) $800,000

Question 18

Obsolescence may cause an asset's useful life to be longer than the asset's physical life.

Accepted Answer

A) True 
 B)False

Question 19

a.What does the net profit margin ratio measure?
b.List three ways in which this ratio can be increased.

Accepted Answer

a.The net profit margin ratio measures h

Question 20

The cost of land includes the cost of any back property taxes that the purchaser pays.

Accepted Answer

A) True 
 B)False

Under the double-declining-balance method of depreciation,residual value is initially ignored.

Natural resources are reported in the Intangible Assets section of the balance sheet.

A company incurred the following costs: What is the cost of the land?

A company incurred the following costs for a new delivery truck: What is the cost of the delivery truck?

Jimmy Company leased a delivery van for payments of $11,000 per year for three years.In addition,Jimmy Company also paid $1,700 for new larger windows in the van and spent $5,400 for special storage racks for the van.Leasehold Improvements equal:

WorldCom's fraudulent scheme of capitalizing telephone line costs instead of expensing them was discovered by:

A distinctive identification of a product or a service is a:

The journal entry to amortize a copyright affects the accounting equation by:

A machine is purchased for $80,000.The transportation cost from the seller was $3,000,installation costs were $2,000 and taxes on the purchase price were $700.Testing runs of the new machine cost $3,000.What is the cost of the machine?

A depreciation method in which an equal amount of depreciation expense is assigned to each year of the asset's use is the:

Leasehold improvements are not subject to depreciation or amortization.

When computing depreciation using the units-of-production method:

Obsolescence may cause an asset's useful life to be longer than the asset's physical life.

a.What does the net profit margin ratio measure? b.List three ways in which this ratio can be increased.

The cost of land includes the cost of any back property taxes that the purchaser pays.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 7: Plant Assets, natural Resources, Intangibles

Under the double-declining-balance method of depreciation,residual value is initially ignored.

Natural resources are reported in the Intangible Assets section of the balance sheet.

A company incurred the following costs: What is the cost of the land?

A company incurred the following costs for a new delivery truck: What is the cost of the delivery truck?

Jimmy Company leased a delivery van for payments of $11,000 per year for three years.In addition,Jimmy Company also paid $1,700 for new larger windows in the van and spent $5,400 for special storage racks for the van.Leasehold Improvements equal:

WorldCom's fraudulent scheme of capitalizing telephone line costs instead of expensing them was discovered by:

A distinctive identification of a product or a service is a:

The journal entry to amortize a copyright affects the accounting equation by:

A machine is purchased for $80,000.The transportation cost from the seller was $3,000,installation costs were $2,000 and taxes on the purchase price were $700.Testing runs of the new machine cost $3,000.What is the cost of the machine?

A depreciation method in which an equal amount of depreciation expense is assigned to each year of the asset's use is the:

Leasehold improvements are not subject to depreciation or amortization.

When computing depreciation using the units-of-production method:

Obsolescence may cause an asset's useful life to be longer than the asset's physical life.

a.What does the net profit margin ratio measure? b.List three ways in which this ratio can be increased.

The cost of land includes the cost of any back property taxes that the purchaser pays.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters