Question 1

The production method is an accelerated method of depreciation.

Accepted Answer

A) True 
 B)False

Question 2

A building not currently used because economic conditions have limited a company's expansion is classified as an investment.

Accepted Answer

A) True 
 B)False

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

Salvage value is not the same as

Accepted Answer

A) carrying value. 
B) residual value. 
C) disposal value. 
D) scrap value. 
A) carrying value. 
B) residual value. 
C) disposal value. 
D) scrap value.

Question 5

Improvements to real estate are never subject to depreciation.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Residual value is relevant when calculating double-declining-balance depreciation.

Accepted Answer

A) True 
 B)False

Question 8

The costs associated with the development of software,for sale or internal use,should be expensed in the period incurred.

Accepted Answer

A) True 
 B)False

Question 9

An intangible asset with a determinable useful life should be amortized over that useful life.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Mozilla Mining Company purchased land containing an estimated 10,000,000 tons of ore for a cost of $750,000.The land without the ore is estimated to be worth $150,000 (the residual value).Buildings costing $45,000 with an estimated useful life of 20 years were erected on the site.Because of the remote location,the buildings have no residual value.The company expects that all the usable ore can be mined in eight years.During its first year of operation,the company mined 1,000,000 tons of ore and at the end of the year had an inventory of 200,000 tons.Determine the following amounts for the first year: (a)depletion charge per ton; (b)depletion expense for year; and (c)depreciation expense for buildings,using the straight-line method.(Show your work.)

Accepted Answer

a.$0.06 [($750,000 - $150,000)

Question 12

When a list of customers or subscribers is purchased,its cost is

Accepted Answer

A) immediately expensed. 
B) capitalized as an intangible asset. 
C) amortized over a maximum of 5 years. 
D) amortized as people on the list move away or pass on. 
A) immediately expensed. 
B) capitalized as an intangible asset. 
C) amortized over a maximum of 5 years. 
D) amortized as people on the list move away or pass on.

Question 13

Prior to the sale of an asset,depreciation should be updated and recorded.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is true about the full-costing method?

Accepted Answer

A) The cost of a dry well would be written off immediately as a loss. 
B) All costs are recorded as assets and then depleted over the resource's useful life. 
C) All costs are written off immediately as a loss. 
D) All costs are recorded as assets and remain on the books as assets. 
A) The cost of a dry well would be written off immediately as a loss. 
B) All costs are recorded as assets and then depleted over the resource's useful life. 
C) All costs are written off immediately as a loss. 
D) All costs are recorded as assets and remain on the books as assets.

Question 15

A capital expenditure results in a debit to a(n)

Accepted Answer

A) expense account. 
B) capital account. 
C) asset account. 
D) liability account. 
A) expense account. 
B) capital account. 
C) asset account. 
D) liability account.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

A specialized piece of equipment closely associated with a mine is most likely to be depreciated over a shorter than normal useful life because the

Accepted Answer

A) equipment will be fully utilized. 
B) income tax laws require that a shorter life be used. 
C) equipment contains certain defects. 
D) mine is expected to be fully depleted in the shorter length of time. 
A) equipment will be fully utilized. 
B) income tax laws require that a shorter life be used. 
C) equipment contains certain defects. 
D) mine is expected to be fully depleted in the shorter length of time.

Question 18

Goodwill reflects all the factors that allow a company to earn a higher-than-market rate of return on its assets.

Accepted Answer

A) True 
 B)False

Question 19

Leasehold improvements are not subject to any form of cost allocation.

Accepted Answer

A) True 
 B)False

Question 20

A building was purchased for $250,000.It has accumulated depreciation of $40,000 and an expected residual value of $50,000.Assuming the use of straight-line depreciation,its estimated useful life must be

Accepted Answer

A) 15 years. 
B) 10 years. 
C) 5 years. 
D) impossible to determine from the facts given. 
A) 15 years. 
B) 10 years. 
C) 5 years. 
D) impossible to determine from the facts given.

The production method is an accelerated method of depreciation.

A building not currently used because economic conditions have limited a company's expansion is classified as an investment.

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

Salvage value is not the same as

Improvements to real estate are never subject to depreciation.

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

Residual value is relevant when calculating double-declining-balance depreciation.

The costs associated with the development of software,for sale or internal use,should be expensed in the period incurred.

An intangible asset with a determinable useful life should be amortized over that useful life.

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

When a list of customers or subscribers is purchased,its cost is

Prior to the sale of an asset,depreciation should be updated and recorded.

Which of the following statements is true about the full-costing method?

A capital expenditure results in a debit to a(n)

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

A specialized piece of equipment closely associated with a mine is most likely to be depreciated over a shorter than normal useful life because the

Goodwill reflects all the factors that allow a company to earn a higher-than-market rate of return on its assets.

Leasehold improvements are not subject to any form of cost allocation.

A building was purchased for $250,000.It has accumulated depreciation of $40,000 and an expected residual value of $50,000.Assuming the use of straight-line depreciation,its estimated useful life must be

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 production method is an accelerated method of depreciation.

A building not currently used because economic conditions have limited a company's expansion is classified as an investment.

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

Salvage value is not the same as

Improvements to real estate are never subject to depreciation.

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

Residual value is relevant when calculating double-declining-balance depreciation.

The costs associated with the development of software,for sale or internal use,should be expensed in the period incurred.

An intangible asset with a determinable useful life should be amortized over that useful life.

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

When a list of customers or subscribers is purchased,its cost is

Prior to the sale of an asset,depreciation should be updated and recorded.

Which of the following statements is true about the full-costing method?

A capital expenditure results in a debit to a(n)

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

A specialized piece of equipment closely associated with a mine is most likely to be depreciated over a shorter than normal useful life because the

Goodwill reflects all the factors that allow a company to earn a higher-than-market rate of return on its assets.

Leasehold improvements are not subject to any form of cost allocation.

A building was purchased for $250,000.It has accumulated depreciation of $40,000 and an expected residual value of $50,000.Assuming the use of straight-line depreciation,its estimated useful life must be

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