Question 1

The exclusive right to publish and sell a literary,artistic,or musical work is called a

Accepted Answer

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

Question 2

Which of the following is not considered an intangible asset?

Accepted Answer

A) License 
B) Gas field 
C) Customer list 
D) Trademark 
A) License 
B) Gas field 
C) Customer list 
D) Trademark

Question 3

According to generally accepted accounting principles,goodwill is recorded as an asset

Accepted Answer

A) when favorable factors combine to create goodwill. 
B) when a company has superior earning power. 
C) when it is paid for as part of the purchase of a business. 
D) under no circumstances. 
A) when favorable factors combine to create goodwill. 
B) when a company has superior earning power. 
C) when it is paid for as part of the purchase of a business. 
D) under no circumstances.

Question 4

The replacement of tires on a truck is considered an ordinary repair.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would be considered a revenue expenditure?

Accepted Answer

A) Cleaning the ink from a printing press 
B) Addition of a storeroom 
C) Purchase of office furniture 
D) Installation of audiovisual equipment in a classroom 
A) Cleaning the ink from a printing press 
B) Addition of a storeroom 
C) Purchase of office furniture 
D) Installation of audiovisual equipment in a classroom

Question 7

Book value is another term for carrying value.

Accepted Answer

A) True 
 B)False

Question 8

The costs associated with the development of software,for sale or internal use,should be expensed in the period incurred.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true about successful efforts accounting?

Accepted Answer

A) It is a depreciation method. 
B) All costs are recorded as assets and then depleted over the resource's useful life. 
C) The cost of a dry well would be written off immediately as a loss. 
D) The cost of successful exploration is recorded as an asset and is not written off. 
A) It is a depreciation method. 
B) All costs are recorded as assets and then depleted over the resource's useful life. 
C) The cost of a dry well would be written off immediately as a loss. 
D) The cost of successful exploration is recorded as an asset and is not written off.

Question 10

Group depreciation is an appropriate method for a large company calculating depreciation on office equipment.

Accepted Answer

A) True 
 B)False

Question 11

Plant assets used in conjunction with a natural resource typically are depreciated

Accepted Answer

A) using income tax depreciation. 
B) using an accelerated depreciation method. 
C) on the same basis as depletion is computed. 
D) on a straight-line basis. 
A) using income tax depreciation. 
B) using an accelerated depreciation method. 
C) on the same basis as depletion is computed. 
D) on a straight-line basis.

Question 12

Equipment costing $60,000 with a residual value of $6,000 and an estimated life of eight years has been depreciated using the straight-line method for two years.Assuming a revised estimated total life of five years,the depreciation expense for year 3 would be

Accepted Answer

A) $6,750. 
B) $9,000. 
C) $13,500. 
D) $10,800. 
A) $6,750. 
B) $9,000. 
C) $13,500. 
D) $10,800.

Question 13

If the carrying value of goodwill is more than its fair value,an impairment loss must be recorded.

Accepted Answer

A) True 
 B)False

Question 14

Russell 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.

Accepted Answer

a.Accumulated Deprec

Question 15

A leasehold is a payment

Accepted Answer

A) for the right to use certain property. 
B) for the right to sublease certain property. 
C) to give up or to get out of a lease. 
D) to improve leased property. 
A) for the right to use certain property. 
B) for the right to sublease certain property. 
C) to give up or to get out of a lease. 
D) to improve leased property.

Question 16

In calculating the depletion of a natural resource,its useful life in years is irrelevant.

Accepted Answer

A) True 
 B)False

Question 17

Extraordinary repairs usually are recorded by making a debit to

Accepted Answer

A) a capital account. 
B) Repair Expense. 
C) a contra-asset account. 
D) an asset account. 
A) a capital account. 
B) Repair Expense. 
C) a contra-asset account. 
D) an asset account.

Question 18

The cost to defend a patent successfully should be expensed in the period incurred.

Accepted Answer

A) True 
 B)False

Question 19

Noncompete covenants should be amortized over the specified life of the contract.

Accepted Answer

A) True 
 B)False

Question 20

Equipment is purchased for $60,000.It has a five-year useful life and a $10,000 residual value.Under the double-declining-balance method,what is the depreciation expense for year 3?

Accepted Answer

A) $6,400 
B) $7,200 
C) $7,680 
D) $8,640 
A) $6,400 
B) $7,200 
C) $7,680 
D) $8,640

Exam 9: Long-Term Assets

The exclusive right to publish and sell a literary,artistic,or musical work is called a

Which of the following is not considered an intangible asset?

According to generally accepted accounting principles,goodwill is recorded as an asset

The replacement of tires on a truck is considered an ordinary repair.

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

Which of the following would be considered a revenue expenditure?

Book value is another term for carrying value.

The costs associated with the development of software,for sale or internal use,should be expensed in the period incurred.

Which of the following statements is true about successful efforts accounting?

Group depreciation is an appropriate method for a large company calculating depreciation on office equipment.

Plant assets used in conjunction with a natural resource typically are depreciated

Equipment costing $60,000 with a residual value of $6,000 and an estimated life of eight years has been depreciated using the straight-line method for two years.Assuming a revised estimated total life of five years,the depreciation expense for year 3 would be

If the carrying value of goodwill is more than its fair value,an impairment loss must be recorded.

A leasehold is a payment

In calculating the depletion of a natural resource,its useful life in years is irrelevant.

Extraordinary repairs usually are recorded by making a debit to

The cost to defend a patent successfully should be expensed in the period incurred.

Noncompete covenants should be amortized over the specified life of the contract.

Equipment is purchased for $60,000.It has a five-year useful life and a $10,000 residual value.Under the double-declining-balance method,what is the depreciation expense for year 3?

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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