Exam 10: Acquisition and Disposition of Property, Plant, and Equipment

When a closely held corporation issues preference shares for land, the land should be recorded at the

Assets purchased on long-term credit contracts should be recorded at the present value of the consideration exchanged.

When a company exchanges non-monetary assets and a loss results, the company recognizes the loss only if the exchange has commercial substance.

Which of the following is not true with regard to the accounting for government grants?

If the cost of the asset is recorded net of the government grant,

Which of these is not a major characteristic of a plant asset?

Assets classified as property, plant, and equipment must be both long-term in nature and possess physical substance.

A government grant generally subsidizes a company by transferring resources to that company.

Which of the following assets do not qualify for capitalization of interest costs incurred during construction of the assets?

Insurance on equipment purchased, while the equipment is in transit, is part of the cost of the equipment.

Companies always treat gains or losses from an involuntary conversion as part of discontinued operations.

Assets that qualify for interest cost capitalization include

The cost of land typically includes the purchase price and all of the following costs except

When capitalizing interest during construction of an asset, an imputed interest cost on stock financing must be included.

If a government entity provides an interest free loan to a company and the company accounts for the grant using the deferred revenue approach,

Plant assets may properly include

The account Deferred Grant Revenue is classified as

Accounting recognition should be given to the gain realized on a non-monetary exchange of plant assets except when the exchange has

Assets classified as property, plant, and equipment can be either acquired for use in operations, or acquired for resale.

If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on