Question 1

The Land account would include all of the following costs except

Accepted Answer

A) drainage costs. 
B) the cost of building a parking lot. 
C) title fees. 
D) the cost of tearing down a building. 
A) drainage costs. 
B) the cost of building a parking lot. 
C) title fees. 
D) the cost of tearing down a building.

Question 2

Account for the derecognition of property, plant, and equipment.

Accepted Answer

The procedure for accounting f

Question 3

Impairment losses on goodwill are never reversed.

Accepted Answer

A) True 
 B)False

Question 4

The cost of a patent should be amortized over its legal life or useful life, whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 5

Equipment with a cost of $160,000, an estimated residual value of $10,000, and an estimated life of 4 years, was purchased on April 1, 2015.If the straight-line method is used, the depreciation expense for calendar 2015 is

Accepted Answer

A) $40,000. 
B) $37,500. 
C) $30,000. 
D) $28,125. 
A) $40,000. 
B) $37,500. 
C) $30,000. 
D) $28,125.

Question 6

Determine the cost of property, plant, and equipment.

Accepted Answer

The cost of land, land improvements, bui

Question 7

The cost of a depreciable long-lived asset is expensed

Accepted Answer

A) when it is paid for. 
B) as the asset benefits the company. 
C) in the period in which it is acquired. 
D) in the period in which it is disposed of. 
A) when it is paid for. 
B) as the asset benefits the company. 
C) in the period in which it is acquired. 
D) in the period in which it is disposed of.

Question 8

On the statement of cash flows, cash flows from the purchase and sale of long-lived assets are shown in which section?

Accepted Answer

A) Operating activities 
B) Investing activities 
C) Financing activities 
D) They are not reported on the statement of cash flows. 
A) Operating activities 
B) Investing activities 
C) Financing activities 
D) They are not reported on the statement of cash flows.

Question 9

When an entire business is purchased, goodwill is the excess of the purchase price over the carrying amount of the net identifiable assets acquired.

Accepted Answer

A) True 
 B)False

Question 10

Intangible assets

Accepted Answer

A) must be reported under the heading Property, Plant, and Equipment. 
B) are not reported on the statement of financial position because they lack physical substance. 
C) should be reported as Current Assets on the statement of financial position. 
D) should be reported separately from Property, Plant, and Equipment. 
A) must be reported under the heading Property, Plant, and Equipment. 
B) are not reported on the statement of financial position because they lack physical substance. 
C) should be reported as Current Assets on the statement of financial position. 
D) should be reported separately from Property, Plant, and Equipment.

Question 11

Aye Corp.purchases a remote-site building for computer operations.The building will be suitable for operations after some necessary expenditures.The wiring must be replaced to handle the computer specifications.The roof is leaking and must be replaced.All rooms must be repainted and re-carpeted and there will also be some updating of the plumbing needed.Which of the following statements is true?

Accepted Answer

A) The cost of the building will include the repainting and re-carpeting costs. 
B) The cost of the building will include the cost of replacing the roof. 
C) The cost of the building is the purchase price of the building, while the additional expenditures are all capitalized as Building Improvements. 
D) The wiring replacement will be part of the computer costs, not the building cost. 
A) The cost of the building will include the repainting and re-carpeting costs. 
B) The cost of the building will include the cost of replacing the roof. 
C) The cost of the building is the purchase price of the building, while the additional expenditures are all capitalized as Building Improvements. 
D) The wiring replacement will be part of the computer costs, not the building cost.

Question 12

On July 1, 2015, Happy Hound Kennels Inc.sells equipment for $20,000.The equipment originally cost $80,000, had an estimated 5-year life and an expected residual value of $10,000.The Accumulated Depreciation account had a balance of $49,000 on January 1, 2015, using the straight-line method.The gain or loss on disposal is

Accepted Answer

A) $4,000 gain. 
B) $4,000 loss. 
C) $11,000 loss. 
D) $11,000 gain. 
A) $4,000 gain. 
B) $4,000 loss. 
C) $11,000 loss. 
D) $11,000 gain.

Question 13

Mandeep Ltd.has decided to change the estimate of the useful life of an asset that has been in service for two years.Which of the following statements describes the proper way to revise a useful life estimate?

Accepted Answer

A) Revisions in useful life are permitted if approved by Canada Revenue Agency. 
B) Both the current and future years will be affected by the revision. 
C) Retroactive changes must be made to correct previously recorded depreciation. 
D) Only future years will be affected by the revision. 
A) Revisions in useful life are permitted if approved by Canada Revenue Agency. 
B) Both the current and future years will be affected by the revision. 
C) Retroactive changes must be made to correct previously recorded depreciation. 
D) Only future years will be affected by the revision.

Question 14

Research costs

Accepted Answer

A) are classified as intangible assets. 
B) must be expensed when incurred. 
C) should be included in the cost of the asset they relate to. 
D) are capitalized and then amortized over their estimated useful life. 
A) are classified as intangible assets. 
B) must be expensed when incurred. 
C) should be included in the cost of the asset they relate to. 
D) are capitalized and then amortized over their estimated useful life.

Question 15

The asset turnover ratio is calculated as net sales divided by ending total assets.

Accepted Answer

A) True 
 B)False

Question 16

Illustrate how long-lived assets are reported in the financial statements.

Accepted Answer

In the statement of financial position,

Question 17

Which of the following should not be classified as property, plant and equipment?

Accepted Answer

A) building used as a factory 
B) land used in ordinary business operations 
C) a truck held for resale by an automobile dealership 
D) land improvements, such as parking lots and fences 
A) building used as a factory 
B) land used in ordinary business operations 
C) a truck held for resale by an automobile dealership 
D) land improvements, such as parking lots and fences

Question 18

The cost of successfully defending a patent in an infringement suit should be

Accepted Answer

A) charged to Legal Expenses. 
B) deducted from the carrying amount of the patent. 
C) added to the cost of the patent. 
D) recognized as a loss in the current period. 
A) charged to Legal Expenses. 
B) deducted from the carrying amount of the patent. 
C) added to the cost of the patent. 
D) recognized as a loss in the current period.

Question 19

Normally, businesses only dispose of property, plant, and equipment by either sale or exchange.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not true for an operating expenditure?

Accepted Answer

A) It is recorded with a debit to a statement of financial position account. 
B) It benefits the current period only. 
C) It is incurred to maintain an asset in its normal operating condition. 
D) It often recurs. 
A) It is recorded with a debit to a statement of financial position account. 
B) It benefits the current period only. 
C) It is incurred to maintain an asset in its normal operating condition. 
D) It often recurs.

The Land account would include all of the following costs except

Account for the derecognition of property, plant, and equipment.

Impairment losses on goodwill are never reversed.

The cost of a patent should be amortized over its legal life or useful life, whichever is shorter.

Equipment with a cost of $160,000, an estimated residual value of $10,000, and an estimated life of 4 years, was purchased on April 1, 2015.If the straight-line method is used, the depreciation expense for calendar 2015 is

Determine the cost of property, plant, and equipment.

The cost of a depreciable long-lived asset is expensed

On the statement of cash flows, cash flows from the purchase and sale of long-lived assets are shown in which section?

When an entire business is purchased, goodwill is the excess of the purchase price over the carrying amount of the net identifiable assets acquired.

Intangible assets

Mandeep Ltd.has decided to change the estimate of the useful life of an asset that has been in service for two years.Which of the following statements describes the proper way to revise a useful life estimate?

Research costs

The asset turnover ratio is calculated as net sales divided by ending total assets.

Illustrate how long-lived assets are reported in the financial statements.

Which of the following should not be classified as property, plant and equipment?

The cost of successfully defending a patent in an infringement suit should be

Normally, businesses only dispose of property, plant, and equipment by either sale or exchange.

Which of the following is not true for an operating expenditure?

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 Land account would include all of the following costs except

Account for the derecognition of property, plant, and equipment.

Impairment losses on goodwill are never reversed.

The cost of a patent should be amortized over its legal life or useful life, whichever is shorter.

Equipment with a cost of $160,000, an estimated residual value of $10,000, and an estimated life of 4 years, was purchased on April 1, 2015.If the straight-line method is used, the depreciation expense for calendar 2015 is

Determine the cost of property, plant, and equipment.

The cost of a depreciable long-lived asset is expensed

On the statement of cash flows, cash flows from the purchase and sale of long-lived assets are shown in which section?

When an entire business is purchased, goodwill is the excess of the purchase price over the carrying amount of the net identifiable assets acquired.

Intangible assets

Mandeep Ltd.has decided to change the estimate of the useful life of an asset that has been in service for two years.Which of the following statements describes the proper way to revise a useful life estimate?

Research costs

The asset turnover ratio is calculated as net sales divided by ending total assets.

Illustrate how long-lived assets are reported in the financial statements.

Which of the following should not be classified as property, plant and equipment?

The cost of successfully defending a patent in an infringement suit should be

Normally, businesses only dispose of property, plant, and equipment by either sale or exchange.

Which of the following is not true for an operating expenditure?

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