Question 1

The Land account would include all of the following costs except

Accepted Answer

A) grading the land. 
B) lawyers' fees. 
C) the cost of adding a parking lot. 
D) the cost of tearing down a building. 
A) grading the land. 
B) lawyers' fees. 
C) the cost of adding a parking lot. 
D) the cost of tearing down a building.

Question 2

Grannis Corporation purchased land adjacent to its plant to improve access for trucks making deliveries.Expenditures incurred by the company were as follows: purchase price,$40,000;broker's fees,$7,000;title search and other fees,$6,000;demolition of an old building on the property,$3,700;grading,$1,200;digging foundation for the road,$3,000;laying and paving driveway,$25,000;lighting,$7,500;signs,$1,500.List the items and the amounts that should be included in the cost of the land and recorded in the Land account.

Accepted Answer

$40,000 price + $7,000 broker'

Question 3

The cost of land should not include accrued property taxes paid by the purchaser.

Accepted Answer

A) True 
 B)False

Question 4

Goodwill represents the excess paid for a business over the fair value of its net assets.

Accepted Answer

A) True 
 B)False

Question 5

A machine that cost $13,000 and on which $9,300 of accumulated depreciation had been recorded was disposed of for $3,700.The entry to record the disposal of the machine is:

Accepted Answer

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

Question 6

If a capital expenditure is incorrectly recorded on a company's books as a revenue expenditure,which of the following statements will be true?

Accepted Answer

A) Net income will be understated for the year. 
B) Stockholders' equity will be overstated at year end. 
C) Total assets will be overstated at year end. 
D) Net income in the following year will be understated. 
A) Net income will be understated for the year. 
B) Stockholders' equity will be overstated at year end. 
C) Total assets will be overstated at year end. 
D) Net income in the following year will be understated.

Question 7

Discuss the difference between the successful efforts and full-costing methods of accounting for oil and gas resources.What type of company is most likely to use each method?

Accepted Answer

With successful efforts accounting,the c

Question 8

Which of the following would not be included in the cost of land?

Accepted Answer

A) Cost of clearing unneeded building from land 
B) Sewer assessment from local government 
C) Cost of paving land for parking 
D) Commission to real estate agent 
A) Cost of clearing unneeded building from land 
B) Sewer assessment from local government 
C) Cost of paving land for parking 
D) Commission to real estate agent

Question 9

The exclusive right to use an identifying symbol is called a patent.

Accepted Answer

A) True 
 B)False

Question 10

The depletion calculation is similar to which of the following depreciation methods?

Accepted Answer

A) Double-declining-balance 
B) Straight-line 
C) Group 
D) Production 
A) Double-declining-balance 
B) Straight-line 
C) Group 
D) Production

Question 11

The Equipment account would include all of the following costs except

Accepted Answer

A) installation costs. 
B) maintenance costs. 
C) equipment test runs. 
D) freight charges. 
A) installation costs. 
B) maintenance costs. 
C) equipment test runs. 
D) freight charges.

Question 12

Ordinary repairs usually result in a debit to the appropriate Accumulated Depreciation account.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) Matching 
B) Materiality 
C) Full disclosure 
D) Consistency 
A) Matching 
B) Materiality 
C) Full disclosure 
D) Consistency

Question 14

Which of the following is the proper formula for computing free cash flow?

Accepted Answer

A) = Net Cash Flows from Investing Activities - Purchases of Plant Assets 
B) = Net Cash Flows from Financing Activities + Sales of Plant Assets - Dividends 
C) = Net Cash Flows from Investing,Financing,and Operating Activities - Purchases of Plant Assets + Sales of Plant Assets 
D) = Net Cash Flows from Operating Activities - Dividends - Purchases of Plant Assets + Sales of Plant Assets 
A) = Net Cash Flows from Investing Activities - Purchases of Plant Assets 
B) = Net Cash Flows from Financing Activities + Sales of Plant Assets - Dividends 
C) = Net Cash Flows from Investing,Financing,and Operating Activities - Purchases of Plant Assets + Sales of Plant Assets 
D) = Net Cash Flows from Operating Activities - Dividends - Purchases of Plant Assets + Sales of Plant Assets

Question 15

On January 2,2013,Topanga Company purchased a machine for $90,000.The machine has a five-year estimated useful life and a $6,000 estimated residual value.In addition,the company expects to use the machine 200,000 hours.Assuming that the machine was used 35,000 hours during 2014,complete the following chart.If a figure cannot be determined,indicate so by placing an "X" in the box.(Show your work. )

Accepted Answer

@#IMG-DLM& 
a. ($90,000 – $6,000) ÷ 5
b. $90,000 –

Question 16

In general,how does one determine whether or not an expenditure should be included in the acquisition cost of property,plant,and equipment?

Accepted Answer

The acquisition cost of proper

Question 17

When an intangible asset becomes worthless,

Accepted Answer

A) it should remain on the books at its existing carrying value. 
B) its remaining carrying value should be written off immediately as a loss. 
C) prior years' accounting records should be adjusted retroactively. 
D) its remaining carrying value should be amortized over 20 years. 
A) it should remain on the books at its existing carrying value. 
B) its remaining carrying value should be written off immediately as a loss. 
C) prior years' accounting records should be adjusted retroactively. 
D) its remaining carrying value should be amortized over 20 years.

Question 18

Partial-year depreciation may be rounded to the nearest whole month or the half-year convention may be used.

Accepted Answer

A) True 
 B)False

Question 19

A graph depicting yearly depreciation expense under the production method will contain a line that

Accepted Answer

A) goes horizontally across. 
B) goes down as one goes from left to right. 
C) cannot be predicted. 
D) goes up as one goes from left to right. 
A) goes horizontally across. 
B) goes down as one goes from left to right. 
C) cannot be predicted. 
D) goes up as one goes from left to right.

Question 20

The cost of land would include the cost of a building purchased with the land and torn down because it was not needed.

Accepted Answer

A) True 
 B)False

Exam 9: Long-Term Assets

The Land account would include all of the following costs except

The cost of land should not include accrued property taxes paid by the purchaser.

Goodwill represents the excess paid for a business over the fair value of its net assets.

A machine that cost $13,000 and on which $9,300 of accumulated depreciation had been recorded was disposed of for $3,700.The entry to record the disposal of the machine is:

If a capital expenditure is incorrectly recorded on a company's books as a revenue expenditure,which of the following statements will be true?

Discuss the difference between the successful efforts and full-costing methods of accounting for oil and gas resources.What type of company is most likely to use each method?

Which of the following would not be included in the cost of land?

The exclusive right to use an identifying symbol is called a patent.

The depletion calculation is similar to which of the following depreciation methods?

The Equipment account would include all of the following costs except

Ordinary repairs usually result in a debit to the appropriate Accumulated Depreciation account.

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

Which of the following is the proper formula for computing free cash flow?

In general,how does one determine whether or not an expenditure should be included in the acquisition cost of property,plant,and equipment?

When an intangible asset becomes worthless,

Partial-year depreciation may be rounded to the nearest whole month or the half-year convention may be used.

A graph depicting yearly depreciation expense under the production method will contain a line that

The cost of land would include the cost of a building purchased with the land and torn down because it was not needed.

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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