Question 1

The carrying amount of an asset is the difference between the

Accepted Answer

A) replacement cost of the asset and its original cost. 
B) 2 cost of the asset and the amount of depreciation expense for the year. 
C) cost of the asset and the accumulated depreciation to date. 
D) proceeds received from the sale of the asset and its original cost. 
A) replacement cost of the asset and its original cost. 
B) 2 cost of the asset and the amount of depreciation expense for the year. 
C) cost of the asset and the accumulated depreciation to date. 
D) proceeds received from the sale of the asset and its original cost.

Question 2

When purchasing a delivery truck, the cost of painting the company logo on the side should be debited to the Vehicles account.

Accepted Answer

A) True 
 B)False

Question 3

Explain and calculate depreciation.

Accepted Answer

Depreciation is the process of allocatin

Question 4

Which of the following would not be included in the Equipment account?

Accepted Answer

A) installation costs 
B) freight costs 
C) cost of trial runs 
D) electricity used by the machine 
A) installation costs 
B) freight costs 
C) cost of trial runs 
D) electricity used by the machine

Question 5

The depreciable amount of property, plant, and equipment is its original cost minus the depreciation for the current year.

Accepted Answer

A) True 
 B)False

Question 6

All research costs should be capitalized when incurred.

Accepted Answer

A) True 
 B)False

Question 7

A truck costing $32,000 was destroyed when its engine caught fire.At the date of the fire, the accumulated depreciation on the truck was $16,000.An insurance cheque for $37,000 was received based on the replacement cost of the truck.The entry to record the insurance proceeds and the disposition of the truck will include a

Accepted Answer

A) gain on disposal of $5,000. 
B) credit to the Truck account for $16,000. 
C) credit to the Accumulated Depreciation account for $16,000. 
D) gain on disposal of $21,000. 
A) gain on disposal of $5,000. 
B) credit to the Truck account for $16,000. 
C) credit to the Accumulated Depreciation account for $16,000. 
D) gain on disposal of $21,000.

Question 8

An item of property, plant, and equipment is considered to be impaired if its carrying amount exceeds its recoverable amount.

Accepted Answer

A) True 
 B)False

Question 9

Use the following information for questions 
On January 1, 2015, Sundry Corp.purchased equipment for $55,000.It was expected to last 8 years, after which it will be sold for $3,000.It is expected to be used for a total of 8,000 machine hours, and was used for 900 hours during the year ended December 31, 2015.
-The depreciation expense for 2015 using the units-of-production method will be

Accepted Answer

A) $5,850. 
B) $6,188. 
C) $6,500. 
D) $13,750. 
A) $5,850. 
B) $6,188. 
C) $6,500. 
D) $13,750.

Question 10

Property, plant, and equipment are ordinarily presented on the statement of financial position

Accepted Answer

A) at fair values. 
B) at replacement cost. 
C) at cost less accumulated depreciation. 
D) in a separate section along with investments. 
A) at fair values. 
B) at replacement cost. 
C) at cost less accumulated depreciation. 
D) in a separate section along with investments.

Question 11

The calculation of depreciation using the diminishing-balance method

Accepted Answer

A) ignores residual value in determining the amount to which a constant rate is applied. 
B) multiplies a constant percentage times the previous year's depreciation expense. 
C) yields an increasing depreciation expense each period. 
D) multiplies a diminishing percentage times a constant carrying amount. 
A) ignores residual value in determining the amount to which a constant rate is applied. 
B) multiplies a constant percentage times the previous year's depreciation expense. 
C) yields an increasing depreciation expense each period. 
D) multiplies a diminishing percentage times a constant carrying amount.

Question 12

Under an operating lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 13

The depreciation method that applies a constant percentage to the carrying amount at the beginning of the period in calculating depreciation is called

Accepted Answer

A) straight-line. 
B) units-of-production. 
C) diminishing-balance. 
D) component depreciation. 
A) straight-line. 
B) units-of-production. 
C) diminishing-balance. 
D) component depreciation.

Question 14

Which of the following statements concerning financial statement presentation is false?

Accepted Answer

A) Intangibles may be reported separately. 
B) The balances of major classes of assets should be disclosed in the notes. 
C) The balances of the accumulated depreciation of major classes of assets should be disclosed in the notes. 
D) The balances of all individual assets, as they appear in the subsidiary ledger, should be disclosed in the notes. 
A) Intangibles may be reported separately. 
B) The balances of major classes of assets should be disclosed in the notes. 
C) The balances of the accumulated depreciation of major classes of assets should be disclosed in the notes. 
D) The balances of all individual assets, as they appear in the subsidiary ledger, should be disclosed in the notes.

Question 15

Equipment that cost of $180,000 has an estimated residual value of $15,000 and an estimated useful life of 4 years or 25,000 hours.Using the units-of-production method, the depreciation expense for the first year, during which the machine was used 3,300 hours, would be

Accepted Answer

A) $45,000. 
B) $41,500. 
C) $23,760. 
D) $21,780. 
A) $45,000. 
B) $41,500. 
C) $23,760. 
D) $21,780.

Question 16

Which of the following statements is incorrect?

Accepted Answer

A) Under the revaluation model, the carrying amount of property, plant and equipment is adjusted to reflect its fair value. 
B) With the revaluation model, revaluation gains are recorded in Other Comprehensive Income. 
C) Companies can choose to use the cost model or the revaluation model for property, plant and equipment. 
D) Reversals of revaluation gains or write-ups are prohibited. 
A) Under the revaluation model, the carrying amount of property, plant and equipment is adjusted to reflect its fair value. 
B) With the revaluation model, revaluation gains are recorded in Other Comprehensive Income. 
C) Companies can choose to use the cost model or the revaluation model for property, plant and equipment. 
D) Reversals of revaluation gains or write-ups are prohibited.

Question 17

Under a finance lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 18

Intangible assets are the rights and privileges that result from ownership of assets that

Accepted Answer

A) must be generated internally. 
B) benefit only the current period. 
C) have physical substance. 
D) do not have physical substance. 
A) must be generated internally. 
B) benefit only the current period. 
C) have physical substance. 
D) do not have physical substance.

Question 19

The diminishing-balance method of depreciation produces a(n)

Accepted Answer

A) decreasing depreciation expense each period. 
B) increasing depreciation expense each period. 
C) diminishing percentage rate each period. 
D) constant amount of depreciation expense each period. 
A) decreasing depreciation expense each period. 
B) increasing depreciation expense each period. 
C) diminishing percentage rate each period. 
D) constant amount of depreciation expense each period.

Question 20

Management should select the depreciation method that

Accepted Answer

A) is easiest to apply. 
B) best measures the asset's fair value each period over its useful life. 
C) best reflects the pattern in which the asset's future economic benefits are to be consumed. 
D) is required by the government. 
A) is easiest to apply. 
B) best measures the asset's fair value each period over its useful life. 
C) best reflects the pattern in which the asset's future economic benefits are to be consumed. 
D) is required by the government.

The carrying amount of an asset is the difference between the

When purchasing a delivery truck, the cost of painting the company logo on the side should be debited to the Vehicles account.

Explain and calculate depreciation.

Which of the following would not be included in the Equipment account?

The depreciable amount of property, plant, and equipment is its original cost minus the depreciation for the current year.

All research costs should be capitalized when incurred.

An item of property, plant, and equipment is considered to be impaired if its carrying amount exceeds its recoverable amount.

Property, plant, and equipment are ordinarily presented on the statement of financial position

The calculation of depreciation using the diminishing-balance method

Under an operating lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

The depreciation method that applies a constant percentage to the carrying amount at the beginning of the period in calculating depreciation is called

Which of the following statements concerning financial statement presentation is false?

Equipment that cost of $180,000 has an estimated residual value of $15,000 and an estimated useful life of 4 years or 25,000 hours.Using the units-of-production method, the depreciation expense for the first year, during which the machine was used 3,300 hours, would be

Which of the following statements is incorrect?

Under a finance lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Intangible assets are the rights and privileges that result from ownership of assets that

The diminishing-balance method of depreciation produces a(n)

Management should select the depreciation method that

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters

Exam 9: Reporting and Analyzing Long-Lived Assets

The carrying amount of an asset is the difference between the

When purchasing a delivery truck, the cost of painting the company logo on the side should be debited to the Vehicles account.

Explain and calculate depreciation.

Which of the following would not be included in the Equipment account?

The depreciable amount of property, plant, and equipment is its original cost minus the depreciation for the current year.

All research costs should be capitalized when incurred.

An item of property, plant, and equipment is considered to be impaired if its carrying amount exceeds its recoverable amount.

Property, plant, and equipment are ordinarily presented on the statement of financial position

The calculation of depreciation using the diminishing-balance method

Under an operating lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

The depreciation method that applies a constant percentage to the carrying amount at the beginning of the period in calculating depreciation is called

Which of the following statements concerning financial statement presentation is false?

Equipment that cost of $180,000 has an estimated residual value of $15,000 and an estimated useful life of 4 years or 25,000 hours.Using the units-of-production method, the depreciation expense for the first year, during which the machine was used 3,300 hours, would be

Which of the following statements is incorrect?

Under a finance lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Intangible assets are the rights and privileges that result from ownership of assets that

The diminishing-balance method of depreciation produces a(n)

Management should select the depreciation method that

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters