Question 1

When depreciation rates are revised,an adjustment for previous years' depreciation must be recorded.

Accepted Answer

A) True 
 B)False

Question 2

The exclusive right to sell a product within a certain geographic area is called a

Accepted Answer

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

Question 3

Computation of a partial year's depreciation is often required for the proper determination of net income.

Accepted Answer

A) True 
 B)False

Question 4

When the trade-in allowance exceeds the carrying value of an asset exchanged,a gain is realized.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Customer lists are classified as intangible assets.

Accepted Answer

A) True 
 B)False

Question 7

The cost of equipment would include the cost of test runs to see that the equipment is operating properly.

Accepted Answer

A) True 
 B)False

Question 8

Chow Company sold a car for $18,100.The cost of the car was $37,500 and an accumulated depreciation of $20,400 had been recorded on the same.The entry to record the disposal of the car is:

Accepted Answer

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

Question 9

Present two arguments in favor of the use of accelerated depreciation.

Accepted Answer

First,assets tend to be more productive

Question 10

Asset impairment occurs when the fair value of a long-term asset exceeds its carrying value.

Accepted Answer

A) True 
 B)False

Question 11

The cost of tearing down a building on land just purchased should be

Accepted Answer

A) debited to the Land account. 
B) debited to the Land Improvements account. 
C) debited to the Buildings account. 
D) expensed immediately. 
A) debited to the Land account. 
B) debited to the Land Improvements account. 
C) debited to the Buildings account. 
D) expensed immediately.

Question 12

You purchased Company B for $220,000 on January 1,2014.Company B's assets were valued as follows:
   In addition,you opened a company bank account and deposited $30,000 cash.All liabilities were paid prior to the transfer of ownership.Create the balance sheet for Company B under your ownership.

Accepted Answer

The answer of You purchased Company B for $220,000 on...

Question 13

A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of on January 1.If the truck was discarded as having no value,the entry to record this event includes

Accepted Answer

A) a gain of $3,000. 
B) a loss of $3,000. 
C) a loss of $6,000. 
D) no recognition of a gain or loss. 
A) a gain of $3,000. 
B) a loss of $3,000. 
C) a loss of $6,000. 
D) no recognition of a gain or loss.

Question 14

The production method is an accelerated method of depreciation.

Accepted Answer

A) True 
 B)False

Question 15

The construction of a new wing on an existing building is described as a(n)

Accepted Answer

A) addition. 
B) extraordinary repair. 
C) revenue expenditure. 
D) betterment. 
A) addition. 
B) extraordinary repair. 
C) revenue expenditure. 
D) betterment.

Question 16

Natural resources are classified as intangible assets on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Licenses are properly classified as intangible assets.

Accepted Answer

A) True 
 B)False

Question 18

A tractor held by a farm equipment company for sale to farmers is classified as a long-term asset.

Accepted Answer

A) True 
 B)False

Question 19

All of the following are possible reasons for using accelerated depreciation except

Accepted Answer

A) greater efficiency of assets when new. 
B) increasing repair costs in later years. 
C) rapid changes in technology. 
D) increasing use of an asset over the years. 
A) greater efficiency of assets when new. 
B) increasing repair costs in later years. 
C) rapid changes in technology. 
D) increasing use of an asset over the years.

Question 20

In 2014,Barnes Enterprises purchased an oil well for $12,000,000.It is estimated that 80,000,000 barrels can be extracted from the well.Depletion expense during 2015,when 2,000,000 barrels were extracted and sold,totaled

Accepted Answer

A) $30,000. 
B) $300,000. 
C) $33,333. 
D) $3,333,333. 
A) $30,000. 
B) $300,000. 
C) $33,333. 
D) $3,333,333.

Exam 9: Long-Term Assets

When depreciation rates are revised,an adjustment for previous years' depreciation must be recorded.

The exclusive right to sell a product within a certain geographic area is called a

Computation of a partial year's depreciation is often required for the proper determination of net income.

When the trade-in allowance exceeds the carrying value of an asset exchanged,a gain is realized.

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

Customer lists are classified as intangible assets.

The cost of equipment would include the cost of test runs to see that the equipment is operating properly.

Chow Company sold a car for $18,100.The cost of the car was $37,500 and an accumulated depreciation of $20,400 had been recorded on the same.The entry to record the disposal of the car is:

Present two arguments in favor of the use of accelerated depreciation.

Asset impairment occurs when the fair value of a long-term asset exceeds its carrying value.

The cost of tearing down a building on land just purchased should be

You purchased Company B for $220,000 on January 1,2014.Company B's assets were valued as follows: In addition,you opened a company bank account and deposited $30,000 cash.All liabilities were paid prior to the transfer of ownership.Create the balance sheet for Company B under your ownership.

A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of on January 1.If the truck was discarded as having no value,the entry to record this event includes

The production method is an accelerated method of depreciation.

The construction of a new wing on an existing building is described as a(n)

Natural resources are classified as intangible assets on the balance sheet.

Licenses are properly classified as intangible assets.

A tractor held by a farm equipment company for sale to farmers is classified as a long-term asset.

All of the following are possible reasons for using accelerated depreciation except

In 2014,Barnes Enterprises purchased an oil well for $12,000,000.It is estimated that 80,000,000 barrels can be extracted from the well.Depletion expense during 2015,when 2,000,000 barrels were extracted and sold,totaled

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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