Question 1

When an impairment loss is recorded for a depreciable asset, the offsetting credit is recorded in accumulated depreciation.

Accepted Answer

A) True 
 B)False

Question 2

The cost allocation of an intangible asset is referred to as

Accepted Answer

A) amortization. 
B) impairment. 
C) depreciation. 
D) depletion. 
A) amortization. 
B) impairment. 
C) depreciation. 
D) depletion.

Question 3

The carrying amount of an asset is the original cost less anticipated residual value.

Accepted Answer

A) True 
 B)False

Question 4

If a trademark is developed internally, it cannot be recognized as an intangible asset on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 5

If an acquired franchise or licence is for an indefinite time period, then the cost of the asset should not be amortized.

Accepted Answer

A) True 
 B)False

Question 6

Jemima Ltd.purchased factory equipment for $200,000, and estimated that the equipment will have a $20,000 residual value at the end of its estimated 5-year useful life.If Jemima uses the double diminishing-balance method of depreciation, the depreciation expense for the second year after purchase would be

Accepted Answer

A) $43,200. 
B) $48,000. 
C) $72,000. 
D) $80,000. 
A) $43,200. 
B) $48,000. 
C) $72,000. 
D) $80,000.

Question 7

Which statement is correct regarding the use of the cost model and the revaluation model?

Accepted Answer

A) The cost model is not allowed under IFRS. 
B) The revaluation model is the only model allowed under IFRS. 
C) The cost model is the only model allowed under ASPE. 
D) Either the cost model or the revaluation model can be under ASPE. 
A) The cost model is not allowed under IFRS. 
B) The revaluation model is the only model allowed under IFRS. 
C) The cost model is the only model allowed under ASPE. 
D) Either the cost model or the revaluation model can be under ASPE.

Question 8

Beynon Corp.purchased office equipment for $20,000, with an estimated residual value of $4,000 at the end of its 8-year useful life.Assuming the double diminishing-balance method is used, the constant percentage to be applied against the carrying amount each year is

Accepted Answer

A) 10%. 
B) 12.5%. 
C) 25%. 
D) not determinable. 
A) 10%. 
B) 12.5%. 
C) 25%. 
D) not determinable.

Question 9

Which of the following is not an advantage of an operating lease?

Accepted Answer

A) reduced risk of obsolescence 
B) 100 percent financing 
C) income tax advantages 
D) accelerated depreciation 
A) reduced risk of obsolescence 
B) 100 percent financing 
C) income tax advantages 
D) accelerated depreciation

Question 10

A change in the estimated useful life of equipment requires

Accepted Answer

A) a retroactive change in the amount of depreciation recognized in previous years. 
B) that no change be made to depreciation calculations, so that depreciation expense amounts are comparable over the life of the asset. 
C) that the amount of depreciation expense be changed in the current and future years. 
D) that profit for the current year be increased. 
A) a retroactive change in the amount of depreciation recognized in previous years. 
B) that no change be made to depreciation calculations, so that depreciation expense amounts are comparable over the life of the asset. 
C) that the amount of depreciation expense be changed in the current and future years. 
D) that profit for the current year be increased.

Question 11

Which one of the following items is not considered to be a part of the cost of a truck purchased for business use?

Accepted Answer

A) insurance during transit 
B) motor vehicle licence 
C) freight charges incurred when acquiring the truck 
D) cost of lettering on the side of the truck 
A) insurance during transit 
B) motor vehicle licence 
C) freight charges incurred when acquiring the truck 
D) cost of lettering on the side of the truck

Question 12

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

Accepted Answer

A) Goodwill is reported separately from intangible assets. 
B) Companies must disclose their policy for testing impairments in the notes to their statements. 
C) Companies reporting under ASPE must include a reconciliation of the changes during the year in the carrying amount for each class of long-lived asset in the notes to their statements. 
D) Companies reporting under IFRS must disclose whether they are using the cost or revaluation model for each class of long-lived asset in the notes to their statements. 
A) Goodwill is reported separately from intangible assets. 
B) Companies must disclose their policy for testing impairments in the notes to their statements. 
C) Companies reporting under ASPE must include a reconciliation of the changes during the year in the carrying amount for each class of long-lived asset in the notes to their statements. 
D) Companies reporting under IFRS must disclose whether they are using the cost or revaluation model for each class of long-lived asset in the notes to their statements.

Question 13

Which of the following is not considered to be an intangible asset?

Accepted Answer

A) a copyright 
B) an oil well 
C) a franchise 
D) a patent 
A) a copyright 
B) an oil well 
C) a franchise 
D) a patent

Question 14

A company purchased land for $120,000 cash; $7,000 was spent to demolish an old building on the land before construction of a new building could start; and $1,500 was received for material salvaged from the old building.The cost of the land would be recorded at

Accepted Answer

A) $120,000. 
B) $125,500. 
C) $127,000. 
D) $128,500. 
A) $120,000. 
B) $125,500. 
C) $127,000. 
D) $128,500.

Question 15

With regard to depreciation and income taxes, which of the following statements is not true?

Accepted Answer

A) When calculating taxable income, the taxpayer must choose the method that best reflects the pattern in which the asset's future economic benefits are consumed. 
B) When calculating taxable income, the taxpayer must use the rate set by Canada Revenue Agency. 
C) When calculating taxable income, the taxpayer must use the diminishing-balance method for most assets. 
D) When calculating taxable income, the amount of depreciation calculated for income tax purposes must be deducted, rather than the amount of depreciation calculated for financial reporting purposes. 
A) When calculating taxable income, the taxpayer must choose the method that best reflects the pattern in which the asset's future economic benefits are consumed. 
B) When calculating taxable income, the taxpayer must use the rate set by Canada Revenue Agency. 
C) When calculating taxable income, the taxpayer must use the diminishing-balance method for most assets. 
D) When calculating taxable income, the amount of depreciation calculated for income tax purposes must be deducted, rather than the amount of depreciation calculated for financial reporting purposes.

Question 16

Land improvements are generally debited to the Land account.

Accepted Answer

A) True 
 B)False

Question 17

A characteristic of property, plant, and equipment is that it is

Accepted Answer

A) intangible. 
B) used in the operations of a business. 
C) held for sale in the ordinary course of the business. 
D) not currently used in the business but held for future use. 
A) intangible. 
B) used in the operations of a business. 
C) held for sale in the ordinary course of the business. 
D) not currently used in the business but held for future use.

Question 18

A truck costing $15,000 and on which $14,000 of accumulated depreciation has been recorded was discarded as having no value.The entry to record this event would include a

Accepted Answer

A) gain of $1,000. 
B) loss of $1,000. 
C) credit to Accumulated Depreciation for $14,000. 
D) credit to Equipment for $1,000. 
A) gain of $1,000. 
B) loss of $1,000. 
C) credit to Accumulated Depreciation for $14,000. 
D) credit to Equipment for $1,000.

Question 19

Goodwill can be recorded

Accepted Answer

A) when customers keep returning because they are satisfied with the company's products. 
B) when the company acquires a good location for its business. 
C) when the company has exceptional management. 
D) only when there is a purchase of an entire business. 
A) when customers keep returning because they are satisfied with the company's products. 
B) when the company acquires a good location for its business. 
C) when the company has exceptional management. 
D) only when there is a purchase of an entire business.

Question 20

Copyrights are granted by the Canadian Intellectual Property Office

Accepted Answer

A) for the life of the creator or 50 years, whichever is longer. 
B) for the life of the creator plus 50 years. 
C) for the life of the creator or 50 years, whichever is shorter. 
D) for 50 years. 
A) for the life of the creator or 50 years, whichever is longer. 
B) for the life of the creator plus 50 years. 
C) for the life of the creator or 50 years, whichever is shorter. 
D) for 50 years.

When an impairment loss is recorded for a depreciable asset, the offsetting credit is recorded in accumulated depreciation.

The cost allocation of an intangible asset is referred to as

The carrying amount of an asset is the original cost less anticipated residual value.

If a trademark is developed internally, it cannot be recognized as an intangible asset on the statement of financial position.

If an acquired franchise or licence is for an indefinite time period, then the cost of the asset should not be amortized.

Which statement is correct regarding the use of the cost model and the revaluation model?

Beynon Corp.purchased office equipment for $20,000, with an estimated residual value of $4,000 at the end of its 8-year useful life.Assuming the double diminishing-balance method is used, the constant percentage to be applied against the carrying amount each year is

Which of the following is not an advantage of an operating lease?

A change in the estimated useful life of equipment requires

Which one of the following items is not considered to be a part of the cost of a truck purchased for business use?

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

Which of the following is not considered to be an intangible asset?

A company purchased land for $120,000 cash; $7,000 was spent to demolish an old building on the land before construction of a new building could start; and $1,500 was received for material salvaged from the old building.The cost of the land would be recorded at

With regard to depreciation and income taxes, which of the following statements is not true?

Land improvements are generally debited to the Land account.

A characteristic of property, plant, and equipment is that it is

A truck costing $15,000 and on which $14,000 of accumulated depreciation has been recorded was discarded as having no value.The entry to record this event would include a

Goodwill can be recorded

Copyrights are granted by the Canadian Intellectual Property Office

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

When an impairment loss is recorded for a depreciable asset, the offsetting credit is recorded in accumulated depreciation.

The cost allocation of an intangible asset is referred to as

The carrying amount of an asset is the original cost less anticipated residual value.

If a trademark is developed internally, it cannot be recognized as an intangible asset on the statement of financial position.

If an acquired franchise or licence is for an indefinite time period, then the cost of the asset should not be amortized.

Which statement is correct regarding the use of the cost model and the revaluation model?

Beynon Corp.purchased office equipment for $20,000, with an estimated residual value of $4,000 at the end of its 8-year useful life.Assuming the double diminishing-balance method is used, the constant percentage to be applied against the carrying amount each year is

Which of the following is not an advantage of an operating lease?

A change in the estimated useful life of equipment requires

Which one of the following items is not considered to be a part of the cost of a truck purchased for business use?

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

Which of the following is not considered to be an intangible asset?

A company purchased land for $120,000 cash; $7,000 was spent to demolish an old building on the land before construction of a new building could start; and $1,500 was received for material salvaged from the old building.The cost of the land would be recorded at

With regard to depreciation and income taxes, which of the following statements is not true?

Land improvements are generally debited to the Land account.

A characteristic of property, plant, and equipment is that it is

A truck costing $15,000 and on which $14,000 of accumulated depreciation has been recorded was discarded as having no value.The entry to record this event would include a

Goodwill can be recorded

Copyrights are granted by the Canadian Intellectual Property Office

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