Question 1

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 2

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 3

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported as Other Revenue in the income statement.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not a consideration when calculating depreciation?

Accepted Answer

A) the method of payment for the asset 
B) the cost of the asset 
C) the useful life of the asset 
D) the residual value of the asset 
A) the method of payment for the asset 
B) the cost of the asset 
C) the useful life of the asset 
D) the residual value of the asset

Question 5

Units-of-production is an appropriate depreciation method to use when

Accepted Answer

A) it is impossible to determine the productivity of the asset. 
B) the asset's use will be constant over its useful life. 
C) the company is a manufacturing company. 
D) the asset's use varies significantly from one period to another. 
A) it is impossible to determine the productivity of the asset. 
B) the asset's use will be constant over its useful life. 
C) the company is a manufacturing company. 
D) the asset's use varies significantly from one period to another.

Question 6

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, 2012. If the straight-line method is used, the depreciation expense for calendar 2012 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 7

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 8

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

Question 9

On January 1, 2012, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000. Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2013 would be

Accepted Answer

A) $10,000. 
B) $ 9,000. 
C) $ 6,000. 
D) $ 5,400. 
A) $10,000. 
B) $ 9,000. 
C) $ 6,000. 
D) $ 5,400.

Question 10

The carrying amount of property, plant, and equipment is always equal to its fair value.

Accepted Answer

A) True 
 B)False

Question 11

Tran Inc purchased equipment for $48,000, and estimated that the equipment will have a $4,000 residual value at the end of its 8-year useful life. Using the double diminishing-balance method, the depreciation expense for the third year would be

Accepted Answer

A) $9,000. 
B) $6,750. 
C) $6,188. 
D) $5,500. 
A) $9,000. 
B) $6,750. 
C) $6,188. 
D) $5,500.

Question 12

The difference between a depreciable asset's cost and its residual value is called

Accepted Answer

A) the annual depreciation. 
B) accumulated depreciation. 
C) the depreciable amount. 
D) the revaluation amount. 
A) the annual depreciation. 
B) accumulated depreciation. 
C) the depreciable amount. 
D) the revaluation amount.

Question 13

Use the following information for questions 
On January 1, 2011, 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 balance in the Accumulated Depreciation account at the end of 2012?

Accepted Answer

A) $22,400 
B) $19,200 
C) $12,600 
D) $10,800 
A) $22,400 
B) $19,200 
C) $12,600 
D) $10,800

Question 14

When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

Accepted Answer

A) True 
 B)False

Question 15

On July 1, 2012, 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, 2012, 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 16

Which of the following statements is not true?

Accepted Answer

A) CCA will be the same whether a company uses the straight-line, diminishing-balance, or units-of-production method. 
B) Cash flow will be affected by the use of different depreciation methods. 
C) Over the life of the asset, total depreciation expense will be the same whether a company uses the straight-line, diminishing-balance, or units-of-production method. 
D) The diminishing-balance depreciation method will result in lower profit compared to the straight-line depreciation method in the early years. 
A) CCA will be the same whether a company uses the straight-line, diminishing-balance, or units-of-production method. 
B) Cash flow will be affected by the use of different depreciation methods. 
C) Over the life of the asset, total depreciation expense will be the same whether a company uses the straight-line, diminishing-balance, or units-of-production method. 
D) The diminishing-balance depreciation method will result in lower profit compared to the straight-line depreciation method in the early years.

Question 17

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 18

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 19

Depreciation is a process of

Accepted Answer

A) determining the asset's fair value. 
B) asset valuation. 
C) cost allocation. 
D) determining the asset's residual value. 
A) determining the asset's fair value. 
B) asset valuation. 
C) cost allocation. 
D) determining the asset's residual value.

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.

Research costs

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

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported as Other Revenue in the income statement.

Which of the following is not a consideration when calculating depreciation?

Units-of-production is an appropriate depreciation method to use when

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, 2012. If the straight-line method is used, the depreciation expense for calendar 2012 is

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

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

On January 1, 2012, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000. Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2013 would be

The carrying amount of property, plant, and equipment is always equal to its fair value.

Tran Inc purchased equipment for $48,000, and estimated that the equipment will have a $4,000 residual value at the end of its 8-year useful life. Using the double diminishing-balance method, the depreciation expense for the third year would be

The difference between a depreciable asset's cost and its residual value is called

When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

Which of the following statements is not true?

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

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

Depreciation is a process of

Copyrights are granted by the Canadian Intellectual Property Office

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 9: Reporting and Analyzing Long-Lived Assets

Research costs

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

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported as Other Revenue in the income statement.

Which of the following is not a consideration when calculating depreciation?

Units-of-production is an appropriate depreciation method to use when

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, 2012. If the straight-line method is used, the depreciation expense for calendar 2012 is

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

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

On January 1, 2012, a machine with a useful life of five years and a residual value of $2,500 was purchased for $25,000. Using the double diminishing-balance method, the depreciation expense for the year ending December 31, 2013 would be

The carrying amount of property, plant, and equipment is always equal to its fair value.

Tran Inc purchased equipment for $48,000, and estimated that the equipment will have a $4,000 residual value at the end of its 8-year useful life. Using the double diminishing-balance method, the depreciation expense for the third year would be

The difference between a depreciable asset's cost and its residual value is called

When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

Which of the following statements is not true?

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

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

Depreciation is a process of

Copyrights are granted by the Canadian Intellectual Property Office

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters