Question 1

Define plant assets and identify the four primary issues in accounting for them.

Accepted Answer

Plant assets are tangible assets used in

Question 2

Companies that have a relatively large amount invested in assets to generate a given level of sales are considered capital-intensive.

Accepted Answer

A) True 
 B)False

Question 3

A copyright gives its owner the exclusive right to publish and sell a musical,literary,or artistic work during the life of the creator plus 70 years.

Accepted Answer

A) True 
 B)False

Question 4

________ refers to a plant asset that is no longer useful in producing goods or services with a competitive advantage because of new inventions and improvements.

Accepted Answer

The answer of ________ refers to a plant asset that...

Question 5

Extraordinary repairs:

Accepted Answer

A) Are revenue expenditures. 
B) Extend the useful life of an asset beyond its original estimate. 
C) Are credited to accumulated depreciation. 
D) Are additional costs of plants assets that do not materially increase the asset's life. 
E) Are expensed when incurred. 
A) Are revenue expenditures. 
B) Extend the useful life of an asset beyond its original estimate. 
C) Are credited to accumulated depreciation. 
D) Are additional costs of plants assets that do not materially increase the asset's life. 
E) Are expensed when incurred.

Question 6

Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000.The machine's useful life is estimated to be 5 years,or 300,000 units of product,with a $15,000 salvage value.During its first year,the machine produces 64,500 units of product.What journal entry would be needed to record the machines' first year depreciation under the units-of-production method?

Accepted Answer

A) Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. 
B) Debit Depletion Expense $29,025; credit Accumulated Depletion $29,025. 
C) Debit Depreciation Expense $29,025; credit Accumulated Depreciation $29,025. 
D) Debit Depreciation Expense $25,800; credit Accumulated Depreciation $25,800. 
E) Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. 
A) Debit Depletion Expense $25,800; credit Accumulated Depletion $25,800. 
B) Debit Depletion Expense $29,025; credit Accumulated Depletion $29,025. 
C) Debit Depreciation Expense $29,025; credit Accumulated Depreciation $29,025. 
D) Debit Depreciation Expense $25,800; credit Accumulated Depreciation $25,800. 
E) Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000.

Question 7

Spears Co.had net sales of $35,400 million.Its average total assets for the period were $14,700 million.Spears' total asset turnover equals:

Accepted Answer

A) 0.42. 
B) 0.35. 
C) 1.48. 
D) 2.41. 
E) 3.54. 
A) 0.42. 
B) 0.35. 
C) 1.48. 
D) 2.41. 
E) 3.54.

Question 8

Duncan reported net sales of $2,523 million and average total assets of $1,476 million.Its total asset turnover equals 0.59.

Accepted Answer

A) True 
 B)False

Question 9

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Accepted Answer

Revenue expenditures do not materially i

Question 10

Additional costs of plant assets that provide benefits extending beyond the current period; they increase or improve the type or amount of service an asset provides are treated as ________.

Accepted Answer

capital ex

Question 11

Colvin Enterprises purchased a depreciable asset on October 1,Year 1 at a cost of $100,000.The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life.If the asset is depreciated on the double-declining-balance method,the asset's book value on December 31,Year 2 will be:

Accepted Answer

A) $36,000 
B) $42,000 
C) $54,000 
D) $16,000 
E) $90,000 
A) $36,000 
B) $42,000 
C) $54,000 
D) $16,000 
E) $90,000

Question 12

What are the general accounting procedures for recording asset disposals?

Accepted Answer

The first step in the accounting process

Question 13

Fields Company purchased equipment on January 1 for $180,000.This system has a useful life of 8 years and a salvage value of $20,000.The company estimates that the equipment will produce 40,000 units over its 8-year useful life.Actual units produced are: Year 1 - 4,000 units; Year 2 - 6,000 units; Year 3 - 8,000 units; Year 4 - 5,000 units; Year 5 - 4,000 units; Year 6 - 5,000 units; Year 7 - 7,000 units; Year 8 - 3,000 units.What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?

Accepted Answer

A) $20,000. 
B) $45,000. 
C) $33,750. 
D) $16,000. 
E) $24,000. 
A) $20,000. 
B) $45,000. 
C) $33,750. 
D) $16,000. 
E) $24,000.

Question 14

The depreciation method that charges the same amount of expense to each period of the asset's useful life is called:

Accepted Answer

A) Accelerated depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS)depreciation. 
A) Accelerated depreciation. 
B) Declining-balance depreciation. 
C) Straight-line depreciation. 
D) Units-of-production depreciation. 
E) Modified accelerated cost recovery system (MACRS)depreciation.

Question 15

Martinez owns machinery that cost $87,000 with accumulated depreciation of $40,000.The company sells the machinery for cash of $42,000.The journal entry to record the sale would include:

Accepted Answer

A) A credit to Accumulated Depreciation of $40,000. 
B) A credit to Gain on Sale of $2,000. 
C) A credit to Machinery of $47,000. 
D) A debit to Cash of $42,000. 
E) A debit to Accumulated Depreciation of $47,000. 
A) A credit to Accumulated Depreciation of $40,000. 
B) A credit to Gain on Sale of $2,000. 
C) A credit to Machinery of $47,000. 
D) A debit to Cash of $42,000. 
E) A debit to Accumulated Depreciation of $47,000.

Question 16

Revenue expenditures are also called balance sheet expenditures.

Accepted Answer

A) True 
 B)False

Question 17

Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000.The machine's useful life is estimated to be 5 years,or 400,000 units of product,with a $7,000 salvage value.During its second year,the machine produces 84,500 units of product.Determine the machines' second year depreciation under the units-of-production method.

Accepted Answer

A) $16,900. 
B) $16,000. 
C) $17,400. 
D) $18,379. 
E) $20,880. 
A) $16,900. 
B) $16,000. 
C) $17,400. 
D) $18,379. 
E) $20,880.

Question 18

Asset turnover is computed by dividing net sales by average total assets.

Accepted Answer

A) True 
 B)False

Question 19

Betterments are:

Accepted Answer

A) Expenditures making a plant asset more efficient or productive. 
B) Also called ordinary repairs. 
C) Always increase an asset's life. 
D) Revenue expenditures. 
E) Credited against the asset account when incurred. 
A) Expenditures making a plant asset more efficient or productive. 
B) Also called ordinary repairs. 
C) Always increase an asset's life. 
D) Revenue expenditures. 
E) Credited against the asset account when incurred.

Question 20

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

Accepted Answer

A) True 
 B)False

Define plant assets and identify the four primary issues in accounting for them.

Companies that have a relatively large amount invested in assets to generate a given level of sales are considered capital-intensive.

A copyright gives its owner the exclusive right to publish and sell a musical,literary,or artistic work during the life of the creator plus 70 years.

________ refers to a plant asset that is no longer useful in producing goods or services with a competitive advantage because of new inventions and improvements.

Extraordinary repairs:

Spears Co.had net sales of $35,400 million.Its average total assets for the period were $14,700 million.Spears' total asset turnover equals:

Duncan reported net sales of $2,523 million and average total assets of $1,476 million.Its total asset turnover equals 0.59.

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Additional costs of plant assets that provide benefits extending beyond the current period; they increase or improve the type or amount of service an asset provides are treated as ________.

What are the general accounting procedures for recording asset disposals?

The depreciation method that charges the same amount of expense to each period of the asset's useful life is called:

Martinez owns machinery that cost $87,000 with accumulated depreciation of $40,000.The company sells the machinery for cash of $42,000.The journal entry to record the sale would include:

Revenue expenditures are also called balance sheet expenditures.

Asset turnover is computed by dividing net sales by average total assets.

Betterments are:

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 8: Reporting and Analyzing Long-Term Assets

Define plant assets and identify the four primary issues in accounting for them.

Companies that have a relatively large amount invested in assets to generate a given level of sales are considered capital-intensive.

A copyright gives its owner the exclusive right to publish and sell a musical,literary,or artistic work during the life of the creator plus 70 years.

________ refers to a plant asset that is no longer useful in producing goods or services with a competitive advantage because of new inventions and improvements.

Extraordinary repairs:

Spears Co.had net sales of $35,400 million.Its average total assets for the period were $14,700 million.Spears' total asset turnover equals:

Duncan reported net sales of $2,523 million and average total assets of $1,476 million.Its total asset turnover equals 0.59.

Explain the difference between revenue expenditures and capital expenditures and how they are recorded in the accounting system.

Additional costs of plant assets that provide benefits extending beyond the current period; they increase or improve the type or amount of service an asset provides are treated as ________.

What are the general accounting procedures for recording asset disposals?

The depreciation method that charges the same amount of expense to each period of the asset's useful life is called:

Martinez owns machinery that cost $87,000 with accumulated depreciation of $40,000.The company sells the machinery for cash of $42,000.The journal entry to record the sale would include:

Revenue expenditures are also called balance sheet expenditures.

Asset turnover is computed by dividing net sales by average total assets.

Betterments are:

Extraordinary repairs are expenditures extending the asset's useful life beyond its original estimate,and are capital expenditures because they benefit future periods.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters