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

Whether exchanging similar or dissimilar assets,accounting for the transaction is the same.

Accepted Answer

A) True 
 B)False

Question 3

The unexpired cost of a plant asset is referred to as its

Accepted Answer

A) depreciable cost. 
B) carrying value. 
C) accumulated depreciation. 
D) original cost. 
A) depreciable cost. 
B) carrying value. 
C) accumulated depreciation. 
D) original cost.

Question 4

A company purchases land and a building on the land.The land is appraised at $96,000 and the building at $384,000.If the Land account is debited for $124,800,then the total purchase price for the land and building must have been

Accepted Answer

A) $480,000. 
B) $500,000. 
C) $508,800. 
D) $624,000. 
A) $480,000. 
B) $500,000. 
C) $508,800. 
D) $624,000.

Question 5

A copyright is obtained for what becomes a very successful book.The publisher expects the book to generate sales for ten years.The copyright should be

Accepted Answer

A) amortized over the author's life plus 70 years. 
B) expensed immediately. 
C) amortized over 10 years. 
D) amortized over a reasonable life. 
A) amortized over the author's life plus 70 years. 
B) expensed immediately. 
C) amortized over 10 years. 
D) amortized over a reasonable life.

Question 6

Equipment is purchased for $40,000.It has an eight-year useful life and a $21,375 residual value.Under the double-declining-balance method,what is the depreciation expense for year 3?

Accepted Answer

A) $875 
B) $1,125 
C) $1,375 
D) $5,625 
A) $875 
B) $1,125 
C) $1,375 
D) $5,625

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

It is necessary to distinguish between capital and revenue expenditures because of which of the following accounting rules or principles?

Accepted Answer

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

Question 9

All of the following are needed for the computation of depreciation except

Accepted Answer

A) residual value. 
B) estimated useful life. 
C) cost. 
D) current market value. 
A) residual value. 
B) estimated useful life. 
C) cost. 
D) current market value.

Question 10

The primary difference between ordinary and extraordinary repairs is that extraordinary repairs

Accepted Answer

A) are an expense of the current period. 
B) are periodic in nature. 
C) are necessary to maintain the asset in good operational condition. 
D) extend the useful life or increase the residual value of the asset. 
A) are an expense of the current period. 
B) are periodic in nature. 
C) are necessary to maintain the asset in good operational condition. 
D) extend the useful life or increase the residual value of the asset.

Question 11

A company purchases an oil well for $400,000.It estimates that the well contains 500,000 barrels,has a ten-year life,and has no salvage value.If the company extracts and sells 40,000 barrels during the first year,how much depletion expense should be recorded?

Accepted Answer

A) $32,000 
B) $40,000 
C) $80,000 
D) $200,000 
A) $32,000 
B) $40,000 
C) $80,000 
D) $200,000

Question 12

Failure to record depletion for a given accounting period will result in

Accepted Answer

A) understated total assets. 
B) understated total liabilities. 
C) overstated net income. 
D) overstated total liabilities. 
A) understated total assets. 
B) understated total liabilities. 
C) overstated net income. 
D) overstated total liabilities.

Question 13

Which of the following is irrelevant in computing a machine's depreciation expense using the production method?

Accepted Answer

A) Actual units produced in a given period 
B) Residual value 
C) Estimated useful life in years 
D) Estimated units produced over its life 
A) Actual units produced in a given period 
B) Residual value 
C) Estimated useful life in years 
D) Estimated units produced over its life

Question 14

Driveways and parking lots are properly included in the Land account because they are not subject to depreciation.

Accepted Answer

A) True 
 B)False

Question 15

Justin,Inc.purchased equipment for $100,000.The equipment had an estimated useful life of eight years and an estimated residual value of $12,000.After five years of use,the estimated residual value is changed to $18,000.Assuming straight-line depreciation,depreciation expense in year 6 would be

Accepted Answer

A) $9,000. 
B) $10,250 
C) $11,000. 
D) $15,000. 
A) $9,000. 
B) $10,250 
C) $11,000. 
D) $15,000.

Question 16

One argument in favor of accelerated depreciation is that the asset's benefit is greater in the earlier years.

Accepted Answer

A) True 
 B)False

Question 17

Equipment was purchased for $117,000.It had an estimated residual value of $18,000 and has a current carrying value of $75,000.Its depreciable cost must have been

Accepted Answer

A) $42,000. 
B) $99,000. 
C) $124,000 
D) impossible to determine from the facts given. 
A) $42,000. 
B) $99,000. 
C) $124,000 
D) impossible to determine from the facts given.

Question 18

The federal government grants patents for

Accepted Answer

A) 10 years. 
B) 20 years. 
C) 40 years. 
D) the useful life of the patent. 
A) 10 years. 
B) 20 years. 
C) 40 years. 
D) the useful life of the patent.

Question 19

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 20

Which of the following accounting principles best justifies accelerated depreciation accounting?

Accepted Answer

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

The Land account would include all of the following costs except

Whether exchanging similar or dissimilar assets,accounting for the transaction is the same.

The unexpired cost of a plant asset is referred to as its

A company purchases land and a building on the land.The land is appraised at $96,000 and the building at $384,000.If the Land account is debited for $124,800,then the total purchase price for the land and building must have been

A copyright is obtained for what becomes a very successful book.The publisher expects the book to generate sales for ten years.The copyright should be

Equipment is purchased for $40,000.It has an eight-year useful life and a $21,375 residual value.Under the double-declining-balance method,what is the depreciation expense for year 3?

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

It is necessary to distinguish between capital and revenue expenditures because of which of the following accounting rules or principles?

All of the following are needed for the computation of depreciation except

The primary difference between ordinary and extraordinary repairs is that extraordinary repairs

A company purchases an oil well for $400,000.It estimates that the well contains 500,000 barrels,has a ten-year life,and has no salvage value.If the company extracts and sells 40,000 barrels during the first year,how much depletion expense should be recorded?

Failure to record depletion for a given accounting period will result in

Which of the following is irrelevant in computing a machine's depreciation expense using the production method?

Driveways and parking lots are properly included in the Land account because they are not subject to depreciation.

Justin,Inc.purchased equipment for $100,000.The equipment had an estimated useful life of eight years and an estimated residual value of $12,000.After five years of use,the estimated residual value is changed to $18,000.Assuming straight-line depreciation,depreciation expense in year 6 would be

One argument in favor of accelerated depreciation is that the asset's benefit is greater in the earlier years.

Equipment was purchased for $117,000.It had an estimated residual value of $18,000 and has a current carrying value of $75,000.Its depreciable cost must have been

The federal government grants patents for

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

Which of the following accounting principles best justifies accelerated depreciation accounting?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters

Exam 10: Long -Term Assets

The Land account would include all of the following costs except

Whether exchanging similar or dissimilar assets,accounting for the transaction is the same.

The unexpired cost of a plant asset is referred to as its

A company purchases land and a building on the land.The land is appraised at $96,000 and the building at $384,000.If the Land account is debited for $124,800,then the total purchase price for the land and building must have been

A copyright is obtained for what becomes a very successful book.The publisher expects the book to generate sales for ten years.The copyright should be

Equipment is purchased for $40,000.It has an eight-year useful life and a $21,375 residual value.Under the double-declining-balance method,what is the depreciation expense for year 3?

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

It is necessary to distinguish between capital and revenue expenditures because of which of the following accounting rules or principles?

All of the following are needed for the computation of depreciation except

The primary difference between ordinary and extraordinary repairs is that extraordinary repairs

A company purchases an oil well for $400,000.It estimates that the well contains 500,000 barrels,has a ten-year life,and has no salvage value.If the company extracts and sells 40,000 barrels during the first year,how much depletion expense should be recorded?

Failure to record depletion for a given accounting period will result in

Which of the following is irrelevant in computing a machine's depreciation expense using the production method?

Driveways and parking lots are properly included in the Land account because they are not subject to depreciation.

Justin,Inc.purchased equipment for $100,000.The equipment had an estimated useful life of eight years and an estimated residual value of $12,000.After five years of use,the estimated residual value is changed to $18,000.Assuming straight-line depreciation,depreciation expense in year 6 would be

One argument in favor of accelerated depreciation is that the asset's benefit is greater in the earlier years.

Equipment was purchased for $117,000.It had an estimated residual value of $18,000 and has a current carrying value of $75,000.Its depreciable cost must have been

The federal government grants patents for

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

Which of the following accounting principles best justifies accelerated depreciation accounting?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters