Question 1

A company is required to purchase all assets at the beginning of an accounting period so that a full year's worth of depreciation can be taken.

Accepted Answer

A) True 
 B)False

Question 2

Treating low-cost asset purchases as expenses is allowed by which principle?

Accepted Answer

A)  Cost. 
B)  Prudence. 
C)  Materiality. 
D)  Matching. 
E)  Timeliness. 
A)  Cost. 
B)  Prudence. 
C)  Materiality. 
D)  Matching. 
E)  Timeliness.

Question 3

An asset can be disposed of by:

Accepted Answer

A)  Discarding. 
B)  Selling. 
C)  Exchanging. 
D)  Donating it to charity. 
E)  All of these answers are correct. 
A)  Discarding. 
B)  Selling. 
C)  Exchanging. 
D)  Donating it to charity. 
E)  All of these answers are correct.

Question 4

The purchase of real estate that includes land,building,and land improvements is called a lump-sum purchase.

Accepted Answer

A) True 
 B)False

Question 5

When accumulated depreciation equals the asset's cost,the asset is fully depreciated.The entry to record the removal of the asset is called exchanging the equipment.

Accepted Answer

A) True 
 B)False

Question 6

SportsWorld uses straight-line depreciation for a piece of equipment that cost $12,000,had a trade-in value of $2,000,and a five-year service life.At the end of the third year,the trade-in value was revised to $1,200 and the useful life increased to a total of 6 years.Calculate the amount of depreciation expense for each of the remaining years of the asset's useful life.

Accepted Answer

A)  $1,000. 
B)  $1,467. 
C)  $1,800. 
D)  $1,600. 
E)  $2,160. 
A)  $1,000. 
B)  $1,467. 
C)  $1,800. 
D)  $1,600. 
E)  $2,160.

Question 7

SportsWorld uses straight-line depreciation for a piece of equipment that cost $12,000,had a salvage value of $2,000,and a five-year service life.At the end of the first year,an impairment loss of $2,000 was recognized on the asset.Calculate the amount of depreciation expense for each of the remaining years of the asset's useful life.

Accepted Answer

A)  $1,500. 
B)  $1,600. 
C)  $2,500. 
D)  $1,800. 
E)  $2,000. 
A)  $1,500. 
B)  $1,600. 
C)  $2,500. 
D)  $1,800. 
E)  $2,000.

Question 8

Capital expenditures are also called balance sheet expenditures.

Accepted Answer

A) True 
 B)False

Question 9

Explain depreciation and the elements affecting its calculation.

Accepted Answer

Depreciation is the process of allocatin

Question 10

On January 1,2014,Boone Company purchased a machine for $75,000 that had a 6-year life and a residual value of $6,000.After 3 years of use,on January 1,2017,Boone Company paid $7,500 to improve the efficiency of the machine.The effect of the expenditure was to increase the productivity of the machine without increasing its remaining useful life or changing its residual value.Boone uses straight-line depreciation.
(1)What account should be debited in recording the $7,500 expenditure?
(2)What amount of depreciation expense should be reported for 2017?

Accepted Answer

(1)Machinery (2)($75,000 - [(7

Question 11

On April 1,2015,Thunderbird Co sold a piece of equipment that had cost $35,000 on January 1,2011.The equipment had a residual value of $5,000,a useful life 10 years,and double-declining-balance depreciation at twice the straight-line rate was used.On December 31,2014,accumulated depreciation was $20,664.The asset was sold for $14,200.
Prepare the journal entry to record depreciation up to the date of disposal of the equipment,and the journal entry to record the disposal of the equipment.

Accepted Answer

The answer of On April 1,2015,Thunderbird Co sold a piece...

Question 12

Regardless of the method of depreciation,total depreciation expense will be the same over an asset's useful life.

Accepted Answer

A) True 
 B)False

Question 13

A main accounting issue for property,plant and equipment is:

Accepted Answer

A)  The cost of property,plant and equipment. 
B)  Testing property,plant and equipment for impairment. 
C)  Accounting for repairs and improvements to property,plant and equipment. 
D)  Disposal of property,plant and equipment. 
E)  All of these answers are correct. 
A)  The cost of property,plant and equipment. 
B)  Testing property,plant and equipment for impairment. 
C)  Accounting for repairs and improvements to property,plant and equipment. 
D)  Disposal of property,plant and equipment. 
E)  All of these answers are correct.

Question 14

On January 1,2014,High Flying Airways acquired and placed in service a plane that cost $8,000,000.The plane's service life and residual value were estimated at 5 years and $1,500,000,respectively.Calculate depreciation for 2014-2018,assuming the following alternative depreciation methods are used:
(a)Straight-line.
(b)Double-declining-balance.

Accepted Answer

The answer of On January 1,2014,High Flying Airways acquired and...

Question 15

Jelly Bean had the following property,plant and equipment purchases during 2014:
(1)On April 4,equipment costing $150,000 with a 5-year service life and an estimated $40,000 residual value was purchased.
(2)On October 4,a machine costing $230,000 with a 5 year service life and an estimated $50,000 residual value was purchased.
Assuming Jelly Bean has a December 31 year end,prepare the necessary adjusting journal entries at December 31,2014 to record depreciation under the following depreciation methods (using the nearest whole month method):
(a)Straight-line.
(b)Double-declining-balance.

Accepted Answer

The answer of Jelly Bean had the following property,plant and...

Question 16

The three factors in calculating depreciation are: ____________,__________,____________.

Accepted Answer

Cost; resi

Question 17

A depreciable asset that is purchased on March 18 would be depreciated for nine months of the first year,if the fiscal year ends on December 31 using nearest whole month method.

Accepted Answer

A) True 
 B)False

Question 18

SASA Company made the following expenditures in connection with the construction of its new soccer facility:   Prepare a schedule showing the amounts to be recorded as Land,Building,and Machinery and Equipment and Expenses.

Accepted Answer

The answer of SASA Company made the following expenditures in...

Question 19

A copyright:

Accepted Answer

A)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 50 years. 
B)  Is an exclusive right granted to its owner to manufacture and sell a machine or device,or to use a process,for 20 years. 
C)  Is an exclusive right granted to its owner to manufacture and sell a machine or device,or to use a process,for 50 years. 
D)  The amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 20 years. 
A)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 50 years. 
B)  Is an exclusive right granted to its owner to manufacture and sell a machine or device,or to use a process,for 20 years. 
C)  Is an exclusive right granted to its owner to manufacture and sell a machine or device,or to use a process,for 50 years. 
D)  The amount by which the value of a company exceeds the fair market value of a company's net assets if purchased separately. 
E)  Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 20 years.

Question 20

If the book value (or carrying amount)of a PPE item is greater than the amount to be recovered through the asset's use or sale,the asset is said to be:

Accepted Answer

A)  Exchanged. 
B)  Declined. 
C)  Accumulated. 
D)  Improved. 
E)  Impaired. 
A)  Exchanged. 
B)  Declined. 
C)  Accumulated. 
D)  Improved. 
E)  Impaired.

A company is required to purchase all assets at the beginning of an accounting period so that a full year's worth of depreciation can be taken.

Treating low-cost asset purchases as expenses is allowed by which principle?

An asset can be disposed of by:

The purchase of real estate that includes land,building,and land improvements is called a lump-sum purchase.

When accumulated depreciation equals the asset's cost,the asset is fully depreciated.The entry to record the removal of the asset is called exchanging the equipment.

Capital expenditures are also called balance sheet expenditures.

Explain depreciation and the elements affecting its calculation.

Regardless of the method of depreciation,total depreciation expense will be the same over an asset's useful life.

A main accounting issue for property,plant and equipment is:

The three factors in calculating depreciation are: ,,__.

A depreciable asset that is purchased on March 18 would be depreciated for nine months of the first year,if the fiscal year ends on December 31 using nearest whole month method.

SASA Company made the following expenditures in connection with the construction of its new soccer facility: Prepare a schedule showing the amounts to be recorded as Land,Building,and Machinery and Equipment and Expenses.

A copyright:

If the book value (or carrying amount)of a PPE item is greater than the amount to be recovered through the asset's use or sale,the asset is said to be:

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

Exam 10: Property,plant and Equipment,and Intangibles

A company is required to purchase all assets at the beginning of an accounting period so that a full year's worth of depreciation can be taken.

Treating low-cost asset purchases as expenses is allowed by which principle?

An asset can be disposed of by:

The purchase of real estate that includes land,building,and land improvements is called a lump-sum purchase.

When accumulated depreciation equals the asset's cost,the asset is fully depreciated.The entry to record the removal of the asset is called exchanging the equipment.

Capital expenditures are also called balance sheet expenditures.

Explain depreciation and the elements affecting its calculation.

Regardless of the method of depreciation,total depreciation expense will be the same over an asset's useful life.

A main accounting issue for property,plant and equipment is:

The three factors in calculating depreciation are: ____________,__________,____________.

A depreciable asset that is purchased on March 18 would be depreciated for nine months of the first year,if the fiscal year ends on December 31 using nearest whole month method.

SASA Company made the following expenditures in connection with the construction of its new soccer facility: Prepare a schedule showing the amounts to be recorded as Land,Building,and Machinery and Equipment and Expenses.

A copyright:

If the book value (or carrying amount)of a PPE item is greater than the amount to be recovered through the asset's use or sale,the asset is said to be:

Current Liabilities

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

The three factors in calculating depreciation are: ,,__.