Question 1

A positive free cash flow means that a company has funds available to reduce debt or expand operations.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The depreciable cost of an asset is

Accepted Answer

A) the unexpired cost of the asset. 
B) original cost minus residual value. 
C) the expired cost of the asset. 
D) original cost minus accumulated depreciation. 
A) the unexpired cost of the asset. 
B) original cost minus residual value. 
C) the expired cost of the asset. 
D) original cost minus accumulated depreciation.

Question 4

Using the full-costing method,the cost of dry wells is capitalized with the cost of producing wells.

Accepted Answer

A) True 
 B)False

Question 5

The cost of assets acquired for a lump sum should be allocated equally among the acquired assets.

Accepted Answer

A) True 
 B)False

Question 6

A truck that cost $24,000 and on which $18,000 of accumulated depreciation has been recorded was disposed of on January 1.Assume that the truck was disposed of for $4,000 cash.The entry to record this event would include

Accepted Answer

A) a debit to Cash. 
B) a debit to Accumulated Depreciation. 
C) a debit to Loss on Sale of Truck. 
D) all of these choices. 
A) a debit to Cash. 
B) a debit to Accumulated Depreciation. 
C) a debit to Loss on Sale of Truck. 
D) all of these choices.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would not be a basis for estimating the useful life of a piece of equipment?

Accepted Answer

A) Potential production in units 
B) Potential hours of service 
C) Historical cost 
D) Years of service 
A) Potential production in units 
B) Potential hours of service 
C) Historical cost 
D) Years of service

Question 9

According to generally accepted accounting principles,the proper accounting treatment of the cost of developing intangible assets is to

Accepted Answer

A) carry the cost as an asset indefinitely. 
B) amortize the cost over five years. 
C) amortize the cost over a reasonable life. 
D) write off the cost immediately. 
A) carry the cost as an asset indefinitely. 
B) amortize the cost over five years. 
C) amortize the cost over a reasonable life. 
D) write off the cost immediately.

Question 10

For each description,provide the letter of the intangible asset that is being described.

Accepted Answer

The answer of For each description,provide the letter of the...

Question 11

If a company is facing negative free cash flow,it may issue stock in order to continue operating at its planned level.

Accepted Answer

A) True 
 B)False

Question 12

Interest costs are included in the cost of an asset in conjunction with

Accepted Answer

A) long-term assets being purchased. 
B) long-term assets acquired for speculative purposes. 
C) long-term assets being constructed. 
D) natural resources and intangible assets. 
A) long-term assets being purchased. 
B) long-term assets acquired for speculative purposes. 
C) long-term assets being constructed. 
D) natural resources and intangible assets.

Question 13

If a company's free cash flow is $90,000,net cash flows from operating activities total $220,000,purchases of plant assets total $100,000,and sales of plant assets total zero,what amount is committed to dividends?

Accepted Answer

A) $20,000 
B) $30,000 
C) $60,000 
D) Impossible to determine from the facts given. 
A) $20,000 
B) $30,000 
C) $60,000 
D) Impossible to determine from the facts given.

Question 14

Customer lists are classified as intangible assets.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would not be debited to the Machinery account?

Accepted Answer

A) Installation costs 
B) Electricity used by the machine 
C) Freight charges 
D) Cost of trial runs 
A) Installation costs 
B) Electricity used by the machine 
C) Freight charges 
D) Cost of trial runs

Question 16

You purchased Company B for $220,000 on January 1,2014.Company B's assets were valued as follows:
   In addition,you opened a company bank account and deposited $30,000 cash.All liabilities were paid prior to the transfer of ownership.Create the balance sheet for Company B under your ownership.

Accepted Answer

The answer of You purchased Company B for $220,000 on...

Question 17

The cost to defend a patent successfully should be expensed in the period incurred.

Accepted Answer

A) True 
 B)False

Question 18

A patent has a legal life of 20 years.

Accepted Answer

A) True 
 B)False

Question 19

Carrying value

Accepted Answer

A) equals cost minus accumulated depreciation. 
B) equals cost minus residual value. 
C) is the expired cost of an asset. 
D) is the same as residual value. 
A) equals cost minus accumulated depreciation. 
B) equals cost minus residual value. 
C) is the expired cost of an asset. 
D) is the same as residual value.

Question 20

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.

A positive free cash flow means that a company has funds available to reduce debt or expand operations.

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

The depreciable cost of an asset is

Using the full-costing method,the cost of dry wells is capitalized with the cost of producing wells.

The cost of assets acquired for a lump sum should be allocated equally among the acquired assets.

A truck that cost $24,000 and on which $18,000 of accumulated depreciation has been recorded was disposed of on January 1.Assume that the truck was disposed of for $4,000 cash.The entry to record this event would include

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

Which of the following would not be a basis for estimating the useful life of a piece of equipment?

According to generally accepted accounting principles,the proper accounting treatment of the cost of developing intangible assets is to

For each description,provide the letter of the intangible asset that is being described.

If a company is facing negative free cash flow,it may issue stock in order to continue operating at its planned level.

Interest costs are included in the cost of an asset in conjunction with

If a company's free cash flow is $90,000,net cash flows from operating activities total $220,000,purchases of plant assets total $100,000,and sales of plant assets total zero,what amount is committed to dividends?

Customer lists are classified as intangible assets.

Which of the following would not be debited to the Machinery account?

You purchased Company B for $220,000 on January 1,2014.Company B's assets were valued as follows: In addition,you opened a company bank account and deposited $30,000 cash.All liabilities were paid prior to the transfer of ownership.Create the balance sheet for Company B under your ownership.

The cost to defend a patent successfully should be expensed in the period incurred.

A patent has a legal life of 20 years.

Carrying value

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

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

A positive free cash flow means that a company has funds available to reduce debt or expand operations.

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

The depreciable cost of an asset is

Using the full-costing method,the cost of dry wells is capitalized with the cost of producing wells.

The cost of assets acquired for a lump sum should be allocated equally among the acquired assets.

A truck that cost $24,000 and on which $18,000 of accumulated depreciation has been recorded was disposed of on January 1.Assume that the truck was disposed of for $4,000 cash.The entry to record this event would include

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

Which of the following would not be a basis for estimating the useful life of a piece of equipment?

According to generally accepted accounting principles,the proper accounting treatment of the cost of developing intangible assets is to

For each description,provide the letter of the intangible asset that is being described.

If a company is facing negative free cash flow,it may issue stock in order to continue operating at its planned level.

Interest costs are included in the cost of an asset in conjunction with

If a company's free cash flow is $90,000,net cash flows from operating activities total $220,000,purchases of plant assets total $100,000,and sales of plant assets total zero,what amount is committed to dividends?

Customer lists are classified as intangible assets.

Which of the following would not be debited to the Machinery account?

You purchased Company B for $220,000 on January 1,2014.Company B's assets were valued as follows: In addition,you opened a company bank account and deposited $30,000 cash.All liabilities were paid prior to the transfer of ownership.Create the balance sheet for Company B under your ownership.

The cost to defend a patent successfully should be expensed in the period incurred.

A patent has a legal life of 20 years.

Carrying value

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

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