Question 1

When applying a revaluation measurement model to assets, the model:

Accepted Answer

A)  applies to the entire class of non-current assets; 
B)  may only be applied to current assets; 
C)  is applied permanently and may not be changed; 
D)  is applied to individual assets within a class of non-current assets. 
A)  applies to the entire class of non-current assets; 
B)  may only be applied to current assets; 
C)  is applied permanently and may not be changed; 
D)  is applied to individual assets within a class of non-current assets.

Question 2

Replicator Limited acquired an item of Plant with an expected useful life of 5 years. Expected total production output over this period was: Year 1, 35 000 units; Year 2, 35 000 units; Year 3, 18 000 units; Year 4, 12 000 units. The asset cost $ 100 000 and associated installation costs amounted to $20 000 and residual value is $5000. The amount of depreciation charged in the first year is:

Accepted Answer

A)  $40 250 
B)  $42 000 
C)  $35 000 
D)  $33 250. 
A)  $40 250 
B)  $42 000 
C)  $35 000 
D)  $33 250.

Question 3

When a company recognises a depreciation credit resulting from a review of the estimated residual value of a depreciable asset, the depreciation debit should be recognised in accumulated depreciation and the depreciation credit should be recognised:

Accepted Answer

A)  in the opening balance of retained earnings 
B)  in the depreciation expense 
C)  directly in the depreciable asset account 
D)  as a gain in the current period. 
A)  in the opening balance of retained earnings 
B)  in the depreciation expense 
C)  directly in the depreciable asset account 
D)  as a gain in the current period.

Question 4

When an asset is sold the resulting gain or loss is:

Accepted Answer

A)  reported in other comprehensive income, normally with separate disclosure of income and the carrying amount of the asset 
B)  reported in other comprehensive income, normally on a net basis 
C)  reported in current period profit or loss, normally with separate disclosure of income and the carrying amount of the asset 
D)  reported in current period profit or loss, normally on a net basis 
A)  reported in other comprehensive income, normally with separate disclosure of income and the carrying amount of the asset 
B)  reported in other comprehensive income, normally on a net basis 
C)  reported in current period profit or loss, normally with separate disclosure of income and the carrying amount of the asset 
D)  reported in current period profit or loss, normally on a net basis

Question 5

After an item of Property, plant and equipment has been initially recognised at cost it may be measured using the following measurement method:

Accepted Answer

A)  liquidation value 
B)  accrual 
C)  revaluation 
D)  realisable value. 
A)  liquidation value 
B)  accrual 
C)  revaluation 
D)  realisable value.

Question 6

When using the revaluation model:

Accepted Answer

A)  ongoing record keeping costs are generally lower than if the cost model were used. 
B)  the values reported will provide more relevant information to users of the financial statements. 
C)  depreciation costs will generally be lower than under the cost model. 
D)  the entities financial statements will be consistent with US GAAP requirements. 
A)  ongoing record keeping costs are generally lower than if the cost model were used. 
B)  the values reported will provide more relevant information to users of the financial statements. 
C)  depreciation costs will generally be lower than under the cost model. 
D)  the entities financial statements will be consistent with US GAAP requirements.

Question 7

A non-current Property, plant and equipment asset is depreciated using the straight-line method. The asset was revalued upwards after four years of use. There is no change in the remaining useful life of six years or to the residual value. Which of the following relationships reflects the effect of the revaluation on the prospective depreciation of the asset?

Accepted Answer

A)  Same Higher 
B)  Same Same 
C)  Higher Higher 
D)  Higher Same 
A)  Same Higher 
B)  Same Same 
C)  Higher Higher 
D)  Higher Same

Question 8

Wilson Limited applied the straight-line method of depreciation to its non-current assets. The cost of the buildings was $640 000, the depreciable amount is $560 000, the residual value is $80 000 and the useful life is 8 years. The annual depreciation charge is:

Accepted Answer

A)  $80 000 
B)  $75 000 
C)  $70 000 
D)  $60 000. 
A)  $80 000 
B)  $75 000 
C)  $70 000 
D)  $60 000.

When applying a revaluation measurement model to assets, the model:

When a company recognises a depreciation credit resulting from a review of the estimated residual value of a depreciable asset, the depreciation debit should be recognised in accumulated depreciation and the depreciation credit should be recognised:

When an asset is sold the resulting gain or loss is:

After an item of Property, plant and equipment has been initially recognised at cost it may be measured using the following measurement method:

When using the revaluation model:

Wilson Limited applied the straight-line method of depreciation to its non-current assets. The cost of the buildings was $640 000, the depreciable amount is $560 000, the residual value is $80 000 and the useful life is 8 years. The annual depreciation charge is:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Inventories

Employee Benefits

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters

Exam 11: Property, Plant and Equipment

When applying a revaluation measurement model to assets, the model:

When a company recognises a depreciation credit resulting from a review of the estimated residual value of a depreciable asset, the depreciation debit should be recognised in accumulated depreciation and the depreciation credit should be recognised:

When an asset is sold the resulting gain or loss is:

After an item of Property, plant and equipment has been initially recognised at cost it may be measured using the following measurement method:

When using the revaluation model:

Wilson Limited applied the straight-line method of depreciation to its non-current assets. The cost of the buildings was $640 000, the depreciable amount is $560 000, the residual value is $80 000 and the useful life is 8 years. The annual depreciation charge is:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Inventories

Employee Benefits

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters