Question 1

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

Question 2

Use the following information for questions 
On January 1, 2022, 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 2022?

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 3

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 net income 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 net income compared to the straight-line depreciation method in the early years.

Question 4

If the carrying amount of an asset equals its selling price at the date of sale, then

Accepted Answer

A) a gain on disposal is recorded. 
B) no gain or loss on disposal is recorded. 
C) the asset is fully depreciated. 
D) a loss on disposal is recorded. 
A) a gain on disposal is recorded. 
B) no gain or loss on disposal is recorded. 
C) the asset is fully depreciated. 
D) a loss on disposal is recorded.

Question 5

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 6

Depreciation expense and impairment losses are presented in

Accepted Answer

A) the operating section of the statement of income. 
B) the operating section and non-operating section of the statement of income, respectively. 
C) the non-operating section of the statement of income. 
D) the non-operating section and operating section of the statement of income, respectively. 
A) the operating section of the statement of income. 
B) the operating section and non-operating section of the statement of income, respectively. 
C) the non-operating section of the statement of income. 
D) the non-operating section and operating section of the statement of income, respectively.

Question 7

Assuming there are no impairment losses, the balance in the Accumulated Depreciation account represents the

Accepted Answer

A) cash fund to be used to replace assets. 
B) amount to be deducted from the cost of the asset to arrive at its fair value. 
C) amount charged to depreciation expense in the current period. 
D) amount charged to depreciation expense since the acquisition of the asset. 
A) cash fund to be used to replace assets. 
B) amount to be deducted from the cost of the asset to arrive at its fair value. 
C) amount charged to depreciation expense in the current period. 
D) amount charged to depreciation expense since the acquisition of the asset.

Question 8

When a company has a piece of property, plant, or equipment that 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 9

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

Accepted Answer

A) True 
 B)False

Question 10

The carrying amount of an asset is the difference between the

Accepted Answer

A) replacement cost of the asset and its original cost. 
B) cost of the asset and the amount of depreciation expense for the year. 
C) cost of the asset and the accumulated depreciation to date. 
D) proceeds received from the sale of the asset and its original cost. 
A) replacement cost of the asset and its original cost. 
B) cost of the asset and the amount of depreciation expense for the year. 
C) cost of the asset and the accumulated depreciation to date. 
D) proceeds received from the sale of the asset and its original cost.

Question 11

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 12

When estimating the useful life of an asset, accountants do not consider

Accepted Answer

A) the cost to replace the asset at the end of its useful life. 
B) vulnerability to obsolescence. 
C) expected repairs and maintenance. 
D) the intended use of the asset. 
A) the cost to replace the asset at the end of its useful life. 
B) vulnerability to obsolescence. 
C) expected repairs and maintenance. 
D) the intended use of the asset.

Question 13

The carrying amount of property, plant, and equipment

Accepted Answer

A) is always equal to its fair value. 
B) is always greater than its fair value. 
C) is always less than its fair value. 
D) may be different than its fair value. 
A) is always equal to its fair value. 
B) is always greater than its fair value. 
C) is always less than its fair value. 
D) may be different than its fair value.

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

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 16

Property, plant & equipment is subdivided into the following classes:

Accepted Answer

A) land, lease improvements, buildings & equipment. 
B) land, computer equipment, plant & buildings. 
C) property, buildings & equipment. 
D) land, land improvements, buildings & equipment. 
A) land, lease improvements, buildings & equipment. 
B) land, computer equipment, plant & buildings. 
C) property, buildings & equipment. 
D) land, land improvements, buildings & equipment.

Question 17

If the disposal of an asset occurs during the year, depreciation is

Accepted Answer

A) not recorded for the year. 
B) recorded for the whole year. 
C) recorded for the fraction of the year to the date of the disposal. 
D) not recorded if the asset is scrapped. 
A) not recorded for the year. 
B) recorded for the whole year. 
C) recorded for the fraction of the year to the date of the disposal. 
D) not recorded if the asset is scrapped.

Question 18

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 19

The depreciation method that applies a constant percentage to the carrying amount at the beginning of the period in calculating depreciation is called

Accepted Answer

A) straight-line. 
B) units-of-production. 
C) diminishing-balance. 
D) component depreciation. 
A) straight-line. 
B) units-of-production. 
C) diminishing-balance. 
D) component depreciation.

Question 20

When an asset is sold, a gain is reported that is equal to the amount that the

Accepted Answer

A) proceeds received exceed the carrying amount of the asset sold. 
B) proceeds received exceed the original cost of the asset sold. 
C) carrying amount exceeds the proceeds received for the asset sold. 
D) proceeds received exceed the depreciable cost of the asset sold. 
A) proceeds received exceed the carrying amount of the asset sold. 
B) proceeds received exceed the original cost of the asset sold. 
C) carrying amount exceeds the proceeds received for the asset sold. 
D) proceeds received exceed the depreciable cost of the asset sold.

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

Use the following information for questions On January 1, 2022, 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 2022?

Which of the following statements is not true?

If the carrying amount of an asset equals its selling price at the date of sale, then

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

Depreciation expense and impairment losses are presented in

Assuming there are no impairment losses, the balance in the Accumulated Depreciation account represents the

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

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

The carrying amount of an asset is the difference between the

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

When estimating the useful life of an asset, accountants do not consider

The carrying amount of property, plant, and equipment

Research costs

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

Property, plant & equipment is subdivided into the following classes:

If the disposal of an asset occurs during the year, depreciation is

Goodwill can be recorded

The depreciation method that applies a constant percentage to the carrying amount at the beginning of the period in calculating depreciation is called

When an asset is sold, a gain is reported that is equal to the amount that the

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

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

Use the following information for questions On January 1, 2022, 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 2022?

Which of the following statements is not true?

If the carrying amount of an asset equals its selling price at the date of sale, then

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

Depreciation expense and impairment losses are presented in

Assuming there are no impairment losses, the balance in the Accumulated Depreciation account represents the

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

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

The carrying amount of an asset is the difference between the

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

When estimating the useful life of an asset, accountants do not consider

The carrying amount of property, plant, and equipment

Research costs

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

Property, plant & equipment is subdivided into the following classes:

If the disposal of an asset occurs during the year, depreciation is

Goodwill can be recorded

The depreciation method that applies a constant percentage to the carrying amount at the beginning of the period in calculating depreciation is called

When an asset is sold, a gain is reported that is equal to the amount that the

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