Question 1

When old equipment is traded in for a new equipment, the difference between the list price and the trade-in allowance is called boot.

Accepted Answer

A) True 
 B)False

Question 2

Land acquired so it can be resold in the future is listed on the balance sheet as a (n)

Accepted Answer

A)  fixed asset 
B)  current asset 
C)  investment 
D)  intangible asset 
A)  fixed asset 
B)  current asset 
C)  investment 
D)  intangible asset

Question 3

Expenditures for research and development are generally recorded as

Accepted Answer

A)  current operating expenses 
B)  assets and amortized over their estimated useful life 
C)  assets and amortized over 40 years 
D)  current assets 
A)  current operating expenses 
B)  assets and amortized over their estimated useful life 
C)  assets and amortized over 40 years 
D)  current assets

Question 4

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of removing an existing building to ready land for use as a new business site

Accepted Answer

A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment 
A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment

Question 5

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with which of the following entries (assuming the exchange was considered to have commercial substance)?

Accepted Answer

A)  debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Exchange of Machinery 
B)  debit Machinery and Accumulated Depreciation; credit Machinery and Cash 
C)  debit Cash and Machinery; credit Accumulated Depreciation 
D)  debit Cash and Machinery; credit Accumulated Depreciation and Machinery 
A)  debit Machinery and Accumulated Depreciation; credit Machinery, Cash, and Gain on Exchange of Machinery 
B)  debit Machinery and Accumulated Depreciation; credit Machinery and Cash 
C)  debit Cash and Machinery; credit Accumulated Depreciation 
D)  debit Cash and Machinery; credit Accumulated Depreciation and Machinery

Question 6

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

Accepted Answer

A)  depletion 
B)  deferral 
C)  amortization 
D)  depreciation 
A)  depletion 
B)  deferral 
C)  amortization 
D)  depreciation

Question 7

The accumulated depletion account is

Accepted Answer

A)  an expense account 
B)  an intangible asset account 
C)  reported on the income statement as other expense 
D)  reported on the balance sheet as a deduction from the cost of the mineral deposit 
A)  an expense account 
B)  an intangible asset account 
C)  reported on the income statement as other expense 
D)  reported on the balance sheet as a deduction from the cost of the mineral deposit

Question 8

Classify each of the following costs associated with long-lived assets as one of the following:
-Freight costs paid on purchase of new equipment

Accepted Answer

A) Buildings 
B) Machinery and equipment 
C) Land 
D) Land improvements 
A) Buildings 
B) Machinery and equipment 
C) Land 
D) Land improvements

Question 9

Classify each of the following costs associated with long-lived assets as one of the following:
-Cost of insurance during the construction of new office building

Accepted Answer

A) Buildings 
B) Machinery and equipment 
C) Land 
D) Land improvements 
A) Buildings 
B) Machinery and equipment 
C) Land 
D) Land improvements

Question 10

Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of five years, or 14,000 operating hours, and a residual value of $10,000. Compute the depreciation for the first and second years of use by each of the following methods:
(a)Straight-line
(b)Units-of-activity 
(1,200 hours first year; 2,250 hours second year)
(c)Double-declining-balance​

Accepted Answer

The answer of Equipment purchased at the beginning of the...

Question 11

Match the intangible assets described with their proper classification (a-d).
​
-iTunes music

Accepted Answer

A) Patent 
B) Copyright 
C) Trademark 
D) Goodwill 
A) Patent 
B) Copyright 
C) Trademark 
D) Goodwill

Question 12

Sands Company purchased mining rights for $500,000. It expects to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include a

Accepted Answer

A)  debit to Depletion Expense for $175,000 
B)  credit to Depletion Expense for $350,000 
C)  debit to Accumulated Depletion for $175,000 
D)  credit to Accumulated Depletion for $350,000 
A)  debit to Depletion Expense for $175,000 
B)  credit to Depletion Expense for $350,000 
C)  debit to Accumulated Depletion for $175,000 
D)  credit to Accumulated Depletion for $350,000

Question 13

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,000, the recognized loss on the trade is

Accepted Answer

A)  $3,000 
B)  $4,500 
C)  $500 
D)  $1,500 
A)  $3,000 
B)  $4,500 
C)  $500 
D)  $1,500

Question 14

Classify each of the following costs associated with long-lived assets as one of the following:
-Modifying a building purchased for new business location

Accepted Answer

A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment 
A) Land improvements 
B) Buildings 
C) Land 
D) Machinery and equipment

Question 15

On June 1, Scotter Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of three years or 30,000 hours.​Using straight-line depreciation, calculate depreciation expense for the first year, which ends on December 31.

Accepted Answer

A)  $17,500 
B)  $30,000 
C)  $12,500 
D)  $40,000 
A)  $17,500 
B)  $30,000 
C)  $12,500 
D)  $40,000

Question 16

During construction of a building, the cost of interest on a construction loan should be charged to an expense account.

Accepted Answer

A) True 
 B)False

Question 17

When a company discards machinery that is fully depreciated, this transaction would be recorded as a

Accepted Answer

A)  debit to Accumulated Depreciation and credit to Machinery 
B)  debit to Machinery and a credit to Accumulated Depreciation 
C)  debit to Cash and a credit to Accumulated Depreciation 
D)  debit to Depreciation Expense and a credit Accumulated Depreciation 
A)  debit to Accumulated Depreciation and credit to Machinery 
B)  debit to Machinery and a credit to Accumulated Depreciation 
C)  debit to Cash and a credit to Accumulated Depreciation 
D)  debit to Depreciation Expense and a credit Accumulated Depreciation

Question 18

The accumulated depletion of a natural resource is reported on the

Accepted Answer

A)  balance sheet as depreciation from the cost of the resource 
B)  income statement as an increase in revenue 
C)  balance sheet as a deduction from the cost of the resource 
D)  income statement as a deduction from revenues 
A)  balance sheet as depreciation from the cost of the resource 
B)  income statement as an increase in revenue 
C)  balance sheet as a deduction from the cost of the resource 
D)  income statement as a deduction from revenues

Question 19

As a company records depreciation expense for a period of time, cash is accumulated to replace fixed assets as they wear out.

Accepted Answer

A) True 
 B)False

Question 20

On the first day of the fiscal year, a new walk-in cooler with a list price of $58,000 was acquired in exchange for an old cooler and $44,000 cash. The old cooler had a cost of $25,000 and accumulated depreciation of $16,000.Assume the transaction has commercial substance.
(a)Determine the gain to be recorded on the exchange.
(b)Journalize the entry to record the exchange.

Accepted Answer

The answer of On the first day of the fiscal...

Exam 10: Long-Term Assets: Fixed and Intangible

When old equipment is traded in for a new equipment, the difference between the list price and the trade-in allowance is called boot.

Land acquired so it can be resold in the future is listed on the balance sheet as a (n)

Expenditures for research and development are generally recorded as

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of removing an existing building to ready land for use as a new business site

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with which of the following entries (assuming the exchange was considered to have commercial substance)?

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

The accumulated depletion account is

Classify each of the following costs associated with long-lived assets as one of the following: -Freight costs paid on purchase of new equipment

Classify each of the following costs associated with long-lived assets as one of the following: -Cost of insurance during the construction of new office building

Match the intangible assets described with their proper classification (a-d). ​ -iTunes music

Sands Company purchased mining rights for $500,000. It expects to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include a

A fixed asset with a cost of $41,000 and accumulated depreciation of $36,500 is traded for a similar asset priced at $60,000. Assuming a trade-in allowance of $3,000, the recognized loss on the trade is

Classify each of the following costs associated with long-lived assets as one of the following: -Modifying a building purchased for new business location

On June 1, Scotter Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of three years or 30,000 hours.​Using straight-line depreciation, calculate depreciation expense for the first year, which ends on December 31.

During construction of a building, the cost of interest on a construction loan should be charged to an expense account.

When a company discards machinery that is fully depreciated, this transaction would be recorded as a

The accumulated depletion of a natural resource is reported on the

As a company records depreciation expense for a period of time, cash is accumulated to replace fixed assets as they wear out.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

Match the intangible assets described with their proper classification (a-d). -iTunes music

On June 1, Scotter Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of three years or 30,000 hours.Using straight-line depreciation, calculate depreciation expense for the first year, which ends on December 31.