Question 1

Use the information above to answer the following question.What is the adjusted balance in the Accumulated Depreciation account at the end of 2015?

Accepted Answer

A) $3,200. 
B) $4,800. 
C) $9,600. 
D) $12,800. 
A) $3,200. 
B) $4,800. 
C) $9,600. 
D) $12,800. D

Question 2

Which of the following statements is true when the straight-line method is used to compute depreciation?

Accepted Answer

A) The carrying value of an asset is a constant amount during the asset's useful life. 
B) Accumulated depreciation is a constant amount during the asset's estimated useful life. 
C) Depreciation is a constant amount each year. 
D) The book value of an asset is an increasing amount during the asset's useful life. 
A) The carrying value of an asset is a constant amount during the asset's useful life. 
B) Accumulated depreciation is a constant amount during the asset's estimated useful life. 
C) Depreciation is a constant amount each year. 
D) The book value of an asset is an increasing amount during the asset's useful life. C

Question 3

A trucking company sold its fleet of trucks for $55,000.The trucks had originally cost $1,410,000 and had accumulated depreciation of $1,269,000 through the date of disposal.What gain or loss did the trucking company record when it sold the fleet of trucks?

Accepted Answer

A) Gain of $86,000. 
B) Gain of $55,000. 
C) Loss of $55,000. 
D) Loss of $86,000. 
A) Gain of $86,000. 
B) Gain of $55,000. 
C) Loss of $55,000. 
D) Loss of $86,000. D

Question 4

Use the information above to answer the following question.If the units-of-production method is used,the depreciation rate is:

Accepted Answer

A) $0.95 per unit. 
B) $0.19 per unit. 
C) $0.05 per unit. 
D) $1.00 per unit. 
A) $0.95 per unit. 
B) $0.19 per unit. 
C) $0.05 per unit. 
D) $1.00 per unit.

Question 5

Impairment occurs when the estimated future cash flows from a long-lived asset fall below its book value.

Accepted Answer

A) True 
 B)False

Question 6

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

Accepted Answer

A) the price for which it could be sold. 
B) its book value or impaired fair value,whichever is lower. 
C) its purchase price minus accumulated amortization. 
D) its purchase price adjusted for inflation. 
A) the price for which it could be sold. 
B) its book value or impaired fair value,whichever is lower. 
C) its purchase price minus accumulated amortization. 
D) its purchase price adjusted for inflation.

Question 7

Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

Accepted Answer

A) Caterpillar accrues and capitalizes $50,000 for self-constructed assets. 
B) Caterpillar accrues a liability for ordinary repair costs in the amount of $50,000. 
C) Caterpillar writes down an impaired piece of equipment by $50,000. 
D) Caterpillar increases the sales returns & allowances by $50,000. 
A) Caterpillar accrues and capitalizes $50,000 for self-constructed assets. 
B) Caterpillar accrues a liability for ordinary repair costs in the amount of $50,000. 
C) Caterpillar writes down an impaired piece of equipment by $50,000. 
D) Caterpillar increases the sales returns & allowances by $50,000.

Question 8

A declining fixed asset turnover ratio suggests that a:

Accepted Answer

A) company is not as efficient in using its fixed assets as it was in previous periods. 
B) company's net sales must be increasing. 
C) company must have purchased some intangible assets. 
D) company's beginning fixed asset balance must be greater than its ending fixed asset balance. 
A) company is not as efficient in using its fixed assets as it was in previous periods. 
B) company's net sales must be increasing. 
C) company must have purchased some intangible assets. 
D) company's beginning fixed asset balance must be greater than its ending fixed asset balance.

Question 9

The balance sheet category "intangible assets" includes:

Accepted Answer

A) Patents,trademarks,and franchises. 
B) Equipment,land,and buildings. 
C) Investments,receivables,and cash. 
D) Goodwill,inventory,and vehicles. 
A) Patents,trademarks,and franchises. 
B) Equipment,land,and buildings. 
C) Investments,receivables,and cash. 
D) Goodwill,inventory,and vehicles.

Question 10

A truck costing $12,000,on which $9,000 of accumulated depreciation has been recorded was sold for $2,000 cash.The entry to record this event would include a:

Accepted Answer

A) gain of $1,000. 
B) loss of $1,000. 
C) credit to the Truck account for $3,000. 
D) credit to Accumulated Depreciation for $9,000. 
A) gain of $1,000. 
B) loss of $1,000. 
C) credit to the Truck account for $3,000. 
D) credit to Accumulated Depreciation for $9,000.

Question 11

Companies with the same asset may report different amounts of depreciation in a given year for all of the following reasons,except

Accepted Answer

A) They use different residual values. 
B) They use different estimated useful lives. 
C) They use different depreciation methods. 
D) They are in different industries. 
A) They use different residual values. 
B) They use different estimated useful lives. 
C) They use different depreciation methods. 
D) They are in different industries.

Question 12

The cost of developing a prototype would probably be capitalized by which of the following companies?

Accepted Answer

A) Lego. 
B) Southwest Airlines. 
C) Walmart. 
D) Cedar Fair. 
A) Lego. 
B) Southwest Airlines. 
C) Walmart. 
D) Cedar Fair.

Question 13

A company acquired property that included land,building and equipment for a total cost of $163,000.The land was appraised at $87,500,the building at $35,000,and the equipment at $52,500.What should be the allocation of the total cost in the accounting records?

Accepted Answer

A) Land $75,000;Building $30,000;Equipment $45,000. 
B) Land $75,000;Building $30,800;Equipment $46,200. 
C) Land $87,500;Building $35,000;Equipment $52,500. 
D) Land $81,500;Building $32,600;Equipment $48,900. 
A) Land $75,000;Building $30,000;Equipment $45,000. 
B) Land $75,000;Building $30,800;Equipment $46,200. 
C) Land $87,500;Building $35,000;Equipment $52,500. 
D) Land $81,500;Building $32,600;Equipment $48,900.

Question 14

The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation.One-half of the total cost is paid in cash;the other half is financed.How should the company record this transaction?

Accepted Answer

A) Debit cash for $250,000,debit notes payable for $250,000 and credit equipment for $500,000. 
B) Debit equipment for $500,000,credit cash for $250,000 and credit notes payable for $250,000. 
C) Debit cash for $250,000,debit notes payable for $250,000 credit equipment for $450,000,and credit expenses for $50,000. 
D) Debit equipment for $450,000,debit expenses for $50,000,credit cash for $250,000 and credit notes payable for $250,000. 
A) Debit cash for $250,000,debit notes payable for $250,000 and credit equipment for $500,000. 
B) Debit equipment for $500,000,credit cash for $250,000 and credit notes payable for $250,000. 
C) Debit cash for $250,000,debit notes payable for $250,000 credit equipment for $450,000,and credit expenses for $50,000. 
D) Debit equipment for $450,000,debit expenses for $50,000,credit cash for $250,000 and credit notes payable for $250,000.

Question 15

If a truck's engine is overhauled for $8,000,the journal entry would normally include a debit to

Accepted Answer

A) Truck 
B) Accounts Payable 
C) Depreciation Expense 
D) Cash 
A) Truck 
B) Accounts Payable 
C) Depreciation Expense 
D) Cash

Question 16

Sneetch Inc.purchased a star-making machine on January 1,2014.The cost of the machine was $17,000.Its estimated residual value was $2,000 at the end of an estimated 10-year life.The company expects to produce a total of 20,000 units.
a.Calculate depreciation expense for 2014 and 2015 using the straight-line method.
b.Calculate depreciation expense for 2014 and 2015 using the double-declining balance method.
c.Calculate the depreciation expense for 2014 and 2015 using the units-of-production method.The company produced 1,500 units in 2014 and 2,200 units in 2015.

Accepted Answer

a.Straight-Line @#IMG-DLM& b.D

Question 17

For which of the following types of equipment would the double-declining balance depreciation method make the most sense?

Accepted Answer

A) Computer hardware. 
B) Automobile and trucks. 
C) Factory equipment. 
D) A warehouse building. 
A) Computer hardware. 
B) Automobile and trucks. 
C) Factory equipment. 
D) A warehouse building.

Question 18

Accumulated depreciation is classified as an expense.

Accepted Answer

A) True 
 B)False

Question 19

The primary difference between ordinary repairs and extraordinary repairs is:

Accepted Answer

A) ordinary repairs cost less. 
B) ordinary repairs are expenditures for routine maintenance and upkeep,whereas extraordinary repairs increase an assets economic usefulness in the future through increased efficiency,capacity,or longer life. 
C) extraordinary repairs only maintain the asset for a short time,whereas ordinary repairs increase the usefulness of assets beyond their original condition. 
D) extraordinary repairs are expenditures,not expenses. 
A) ordinary repairs cost less. 
B) ordinary repairs are expenditures for routine maintenance and upkeep,whereas extraordinary repairs increase an assets economic usefulness in the future through increased efficiency,capacity,or longer life. 
C) extraordinary repairs only maintain the asset for a short time,whereas ordinary repairs increase the usefulness of assets beyond their original condition. 
D) extraordinary repairs are expenditures,not expenses.

Question 20

If net sales revenue and the average book value of fixed assets both rise 5%:

Accepted Answer

A) the fixed asset turnover ratio will rise. 
B) the fixed asset turnover ratio will fall. 
C) the fixed asset turnover ratio will stay the same. 
D) the impact on the fixed asset turnover ratio cannot be determined since the beginning values are unknown. 
A) the fixed asset turnover ratio will rise. 
B) the fixed asset turnover ratio will fall. 
C) the fixed asset turnover ratio will stay the same. 
D) the impact on the fixed asset turnover ratio cannot be determined since the beginning values are unknown.

Use the information above to answer the following question.What is the adjusted balance in the Accumulated Depreciation account at the end of 2015?

Which of the following statements is true when the straight-line method is used to compute depreciation?

A trucking company sold its fleet of trucks for $55,000.The trucks had originally cost $1,410,000 and had accumulated depreciation of $1,269,000 through the date of disposal.What gain or loss did the trucking company record when it sold the fleet of trucks?

Use the information above to answer the following question.If the units-of-production method is used,the depreciation rate is:

Impairment occurs when the estimated future cash flows from a long-lived asset fall below its book value.

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

A declining fixed asset turnover ratio suggests that a:

The balance sheet category "intangible assets" includes:

A truck costing $12,000,on which $9,000 of accumulated depreciation has been recorded was sold for $2,000 cash.The entry to record this event would include a:

Companies with the same asset may report different amounts of depreciation in a given year for all of the following reasons,except

The cost of developing a prototype would probably be capitalized by which of the following companies?

A company acquired property that included land,building and equipment for a total cost of $163,000.The land was appraised at $87,500,the building at $35,000,and the equipment at $52,500.What should be the allocation of the total cost in the accounting records?

The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation.One-half of the total cost is paid in cash;the other half is financed.How should the company record this transaction?

If a truck's engine is overhauled for $8,000,the journal entry would normally include a debit to

For which of the following types of equipment would the double-declining balance depreciation method make the most sense?

Accumulated depreciation is classified as an expense.

The primary difference between ordinary repairs and extraordinary repairs is:

If net sales revenue and the average book value of fixed assets both rise 5%:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control, Cash, and Merchandise Sales

Inventories and Cost of Goods Sold

Receivables, Bad Debt Expense, and Interest Revenue

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

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Exam 9: Long-Lived Tangible and Intangible Assets

Use the information above to answer the following question.What is the adjusted balance in the Accumulated Depreciation account at the end of 2015?

Which of the following statements is true when the straight-line method is used to compute depreciation?

A trucking company sold its fleet of trucks for $55,000.The trucks had originally cost $1,410,000 and had accumulated depreciation of $1,269,000 through the date of disposal.What gain or loss did the trucking company record when it sold the fleet of trucks?

Use the information above to answer the following question.If the units-of-production method is used,the depreciation rate is:

Impairment occurs when the estimated future cash flows from a long-lived asset fall below its book value.

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

A declining fixed asset turnover ratio suggests that a:

The balance sheet category "intangible assets" includes:

A truck costing $12,000,on which $9,000 of accumulated depreciation has been recorded was sold for $2,000 cash.The entry to record this event would include a:

Companies with the same asset may report different amounts of depreciation in a given year for all of the following reasons,except

The cost of developing a prototype would probably be capitalized by which of the following companies?

A company acquired property that included land,building and equipment for a total cost of $163,000.The land was appraised at $87,500,the building at $35,000,and the equipment at $52,500.What should be the allocation of the total cost in the accounting records?

The Gulp convenience store chain buys new soda machines for $450,000 and pays $50,000 for installation.One-half of the total cost is paid in cash;the other half is financed.How should the company record this transaction?

If a truck's engine is overhauled for $8,000,the journal entry would normally include a debit to

For which of the following types of equipment would the double-declining balance depreciation method make the most sense?

Accumulated depreciation is classified as an expense.

The primary difference between ordinary repairs and extraordinary repairs is:

If net sales revenue and the average book value of fixed assets both rise 5%:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control, Cash, and Merchandise Sales

Inventories and Cost of Goods Sold

Receivables, Bad Debt Expense, and Interest Revenue

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters