Question 1

A loss on disposal results if the cash proceeds received from the asset sale are less than the asset's carrying amount.

Accepted Answer

A) True 
 B)False

Question 2

The expected costs to retire an asset are called

Accepted Answer

A) off-balance sheet financing. 
B) expected retirement costs. 
C) disposal costs. 
D) asset retirement costs. 
A) off-balance sheet financing. 
B) expected retirement costs. 
C) disposal costs. 
D) asset retirement costs.

Question 3

When a company has a piece of property, plant, or equipment which has different components that depreciate at different rates, the total cost should be allocated to each component and each component should be depreciated separately.

Accepted Answer

A) True 
 B)False

Question 4

Anali Corporation has determined that its drilling equipment is impaired.The cost of the equipment is $210,000.Accumulated depreciation recorded to date is $140,000.Anali has determined, that based on market data, the recoverable amount will be $45,000.Determine the amount of the impairment loss that Anali will be required to record.

Accepted Answer

A) $25,000 
B) $70,000 
C) $45,000 
D) $210,000 
A) $25,000 
B) $70,000 
C) $45,000 
D) $210,000

Question 5

Vickers Ltd.uses the units-of-production depreciation method.A new asset is purchased for $27,000 that will produce an estimated 125,000 units over its useful life.Estimated residual value is $2,000.What is the depreciable cost per unit?

Accepted Answer

A) $2.20 
B) $2.16 
C) $0.22 
D) $0.20 
A) $2.20 
B) $2.16 
C) $0.22 
D) $0.20

Question 6

Which of the following is not an acceptable method of depreciation?

Accepted Answer

A) straight-line 
B) increasing-balance 
C) diminishing-balance 
D) units-of-production 
A) straight-line 
B) increasing-balance 
C) diminishing-balance 
D) units-of-production

Question 7

On October 1, 2015, Ming Wo Ltd.places a new asset into service.The cost of the asset is $16,000 with an estimated 5-year life and $4,000 residual value.If Ming Wo uses straight-line depreciation, the depreciation expense for the year ended January 31, 2016 is

Accepted Answer

A) $ 600. 
B) $ 800. 
C) $1,067. 
D) $2,400. 
A) $ 600. 
B) $ 800. 
C) $1,067. 
D) $2,400.

Question 8

Use the following information for questions 
On January 1, 2014, Flowers Unlimited purchased a new delivery van.The van cost $35,000 with an estimated life of 5 years and $5,000 residual value.Double diminishing-balance depreciation will be used.
-What is the depreciation expense for calendar 2014?

Accepted Answer

A) $ 3,000 
B) $ 6,000 
C) $12,000 
D) $14,000 
A) $ 3,000 
B) $ 6,000 
C) $12,000 
D) $14,000

Question 9

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported in the Other Revenues and Expenses section of the income statement.

Accepted Answer

A) True 
 B)False

Question 10

On December 31, 2015, Cee Corp.sells an asset that originally cost $300,000 for $75,000.The accumulated depreciation account has a balance of $200,000 after the current year's depreciation of $15,000 had been recorded.The company should recognize a gain or loss on disposal of

Accepted Answer

A) $ 25,000 gain. 
B) $ 25,000 loss. 
C) $125,000 gain. 
D) $125,000 loss. 
A) $ 25,000 gain. 
B) $ 25,000 loss. 
C) $125,000 gain. 
D) $125,000 loss.

Question 11

The cost of land does not include

Accepted Answer

A) closing costs. 
B) annual property taxes. 
C) removal costs of an old building. 
D) title fees. 
A) closing costs. 
B) annual property taxes. 
C) removal costs of an old building. 
D) title fees.

Question 12

A tangible asset must be fully depreciated before it can be removed from the books.

Accepted Answer

A) True 
 B)False

Question 13

Intangible assets involve rights, privileges, and/or competitive advantages that result from ownership of identifiable assets that do not possess physical substance.

Accepted Answer

A) True 
 B)False

Question 14

In recording the acquisition cost of an entire business

Accepted Answer

A) goodwill is recorded as the excess of cost over the fair value of identifiable net assets. 
B) assets are recorded at the seller's carrying amounts. 
C) goodwill, if it exists, is never recorded. 
D) goodwill is recorded as the excess of cost over the carrying amount of identifiable net assets. 
A) goodwill is recorded as the excess of cost over the fair value of identifiable net assets. 
B) assets are recorded at the seller's carrying amounts. 
C) goodwill, if it exists, is never recorded. 
D) goodwill is recorded as the excess of cost over the carrying amount of identifiable net assets.

Question 15

An asset with a cost of $45,000 and accumulated depreciation of $37,500 is sold for $9,500.What is the amount of the gain or loss on disposal?

Accepted Answer

A) $2,500 loss 
B) $2,500 gain 
C) $2,000 gain 
D) $2,000 loss 
A) $2,500 loss 
B) $2,500 gain 
C) $2,000 gain 
D) $2,000 loss

Question 16

Action Advertising Corp.has the following assets:   The total amount reported under Property, Plant, and Equipment would be

Accepted Answer

A) $15,000,000. 
B) $18,200,000. 
C) $20,500,000. 
D) $27,500,000. 
A) $15,000,000. 
B) $18,200,000. 
C) $20,500,000. 
D) $27,500,000.

Question 17

All property, plant, and equipment must be depreciated for accounting purposes.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following assets does not decline in service potential over the course of its useful life?

Accepted Answer

A) office equipment 
B) furnishings 
C) land 
D) computers 
A) office equipment 
B) furnishings 
C) land 
D) computers

Question 19

Describe the methods for evaluating the use of assets.

Accepted Answer

The use of assets may be analyzed using

Question 20

Leasehold improvements are depreciated over the remaining life of the lease or the useful life of the improvements, whichever is longer.

Accepted Answer

A) True 
 B)False

A loss on disposal results if the cash proceeds received from the asset sale are less than the asset's carrying amount.

The expected costs to retire an asset are called

When a company has a piece of property, plant, or equipment which has different components that depreciate at different rates, the total cost should be allocated to each component and each component should be depreciated separately.

Vickers Ltd.uses the units-of-production depreciation method.A new asset is purchased for $27,000 that will produce an estimated 125,000 units over its useful life.Estimated residual value is $2,000.What is the depreciable cost per unit?

Which of the following is not an acceptable method of depreciation?

On October 1, 2015, Ming Wo Ltd.places a new asset into service.The cost of the asset is $16,000 with an estimated 5-year life and $4,000 residual value.If Ming Wo uses straight-line depreciation, the depreciation expense for the year ended January 31, 2016 is

Use the following information for questions On January 1, 2014, Flowers Unlimited purchased a new delivery van.The van cost $35,000 with an estimated life of 5 years and $5,000 residual value.Double diminishing-balance depreciation will be used. -What is the depreciation expense for calendar 2014?

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported in the Other Revenues and Expenses section of the income statement.

On December 31, 2015, Cee Corp.sells an asset that originally cost $300,000 for $75,000.The accumulated depreciation account has a balance of $200,000 after the current year's depreciation of $15,000 had been recorded.The company should recognize a gain or loss on disposal of

The cost of land does not include

A tangible asset must be fully depreciated before it can be removed from the books.

Intangible assets involve rights, privileges, and/or competitive advantages that result from ownership of identifiable assets that do not possess physical substance.

In recording the acquisition cost of an entire business

An asset with a cost of $45,000 and accumulated depreciation of $37,500 is sold for $9,500.What is the amount of the gain or loss on disposal?

Action Advertising Corp.has the following assets: The total amount reported under Property, Plant, and Equipment would be

All property, plant, and equipment must be depreciated for accounting purposes.

Which of the following assets does not decline in service potential over the course of its useful life?

Describe the methods for evaluating the use of assets.

Leasehold improvements are depreciated over the remaining life of the lease or the useful life of the improvements, whichever is longer.

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

A loss on disposal results if the cash proceeds received from the asset sale are less than the asset's carrying amount.

The expected costs to retire an asset are called

When a company has a piece of property, plant, or equipment which has different components that depreciate at different rates, the total cost should be allocated to each component and each component should be depreciated separately.

Vickers Ltd.uses the units-of-production depreciation method.A new asset is purchased for $27,000 that will produce an estimated 125,000 units over its useful life.Estimated residual value is $2,000.What is the depreciable cost per unit?

Which of the following is not an acceptable method of depreciation?

On October 1, 2015, Ming Wo Ltd.places a new asset into service.The cost of the asset is $16,000 with an estimated 5-year life and $4,000 residual value.If Ming Wo uses straight-line depreciation, the depreciation expense for the year ended January 31, 2016 is

Use the following information for questions On January 1, 2014, Flowers Unlimited purchased a new delivery van.The van cost $35,000 with an estimated life of 5 years and $5,000 residual value.Double diminishing-balance depreciation will be used. -What is the depreciation expense for calendar 2014?

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported in the Other Revenues and Expenses section of the income statement.

On December 31, 2015, Cee Corp.sells an asset that originally cost $300,000 for $75,000.The accumulated depreciation account has a balance of $200,000 after the current year's depreciation of $15,000 had been recorded.The company should recognize a gain or loss on disposal of

The cost of land does not include

A tangible asset must be fully depreciated before it can be removed from the books.

Intangible assets involve rights, privileges, and/or competitive advantages that result from ownership of identifiable assets that do not possess physical substance.

In recording the acquisition cost of an entire business

An asset with a cost of $45,000 and accumulated depreciation of $37,500 is sold for $9,500.What is the amount of the gain or loss on disposal?

Action Advertising Corp.has the following assets: The total amount reported under Property, Plant, and Equipment would be

All property, plant, and equipment must be depreciated for accounting purposes.

Which of the following assets does not decline in service potential over the course of its useful life?

Describe the methods for evaluating the use of assets.

Leasehold improvements are depreciated over the remaining life of the lease or the useful life of the improvements, whichever is longer.

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