Question 1

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 2

Which one of the following items is notnotof 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 3

A truck costing $14,000 and on which $12,000 of accumulated depreciation has been recorded was disposed of for $3,000 cash.The entry to record this event would include a

Accepted Answer

A) loss on disposal of $1,000. 
B) gain on disposal of $1,000. 
C) credit to the Truck account for $3,000. 
D) credit to Accumulated Depreciation for $12,000. 
A) loss on disposal of $1,000. 
B) gain on disposal of $1,000. 
C) credit to the Truck account for $3,000. 
D) credit to Accumulated Depreciation for $12,000.

Question 4

A loss on disposal of an asset is reported in the financial statements

Accepted Answer

A) in the operating section of the statement of income. 
B) in the non-operating section of the statement of income. 
C) as part of Other Comprehensive Income. 
D) as part of Cost of Goods Sold. 
A) in the operating section of the statement of income. 
B) in the non-operating section of the statement of income. 
C) as part of Other Comprehensive Income. 
D) as part of Cost of Goods Sold.

Question 5

On October 1, 2022, Ming Wo Ltd.places a new asset into service.The cost of the asset is $16,000 with an estimated 5-year life and $4,000 residual value.If Ming Wo uses straight-line depreciation, the depreciation expense for the year ended January 31, 2023 is

Accepted Answer

A) $ 600. 
B) $ 800. 
C) $1,067. 
D) $2,400. 
A) $ 600. 
B) $ 800. 
C) $1,067. 
D) $2,400.

Question 6

Mercy General Hospital installs a new parking lot.The paving cost $25,000 and the lights to illuminate the new parking lot cost $13,000.Which of the following statements is true with respect to these expenditures?

Accepted Answer

A) $25,000 should be debited to Land. 
B) $13,000 should be debited to Lighting Expense. 
C) $38,000 should be debited to Land. 
D) $38,000 should be debited to Land Improvements. 
A) $25,000 should be debited to Land. 
B) $13,000 should be debited to Lighting Expense. 
C) $38,000 should be debited to Land. 
D) $38,000 should be debited to Land Improvements.

Question 7

The depreciable amount of property, plant, and equipment is its original cost minus the depreciation for the current year.

Accepted Answer

A) True 
 B)False

Question 8

Use the following information for questions 
On January 1, 2022, Anvil Corp.purchased equipment for $60,000.It was expected to last 5 years, after which it will be sold for $5,000.It is expected to be used for a total of 10,000 machine hours, and was used for 750 hours during the year ended December 31, 2022.
-The depreciation expense for 2022 using the straight-line method will be

Accepted Answer

A) $4,125. 
B) $11,000. 
C) $12,000. 
D) $12,250. 
A) $4,125. 
B) $11,000. 
C) $12,000. 
D) $12,250.

Question 9

Land improvements should be depreciated over the useful life of the

Accepted Answer

A) land. 
B) buildings on the land. 
C) land or land improvements, whichever is longer. 
D) land improvements. 
A) land. 
B) buildings on the land. 
C) land or land improvements, whichever is longer. 
D) land improvements.

Question 10

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 11

An intangible asset should

Accepted Answer

A) not be amortized if it has an finite life. 
B) not be amortized if it has an indefinite life. 
C) be amortized over its legal or useful life, whichever is longer. 
D) be amortized over 5 years or less. 
A) not be amortized if it has an finite life. 
B) not be amortized if it has an indefinite life. 
C) be amortized over its legal or useful life, whichever is longer. 
D) be amortized over 5 years or less.

Question 12

Property, plant, and equipment are ordinarily presented on the statement of financial position

Accepted Answer

A) at fair values. 
B) at replacement cost. 
C) at cost less accumulated depreciation. 
D) in a separate section along with investments. 
A) at fair values. 
B) at replacement cost. 
C) at cost less accumulated depreciation. 
D) in a separate section along with investments.

Question 13

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported in the Other Income and Expenses section of the statement of income.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

Under a capital lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 17

Anali Corporation has determined that its drilling equipment is impaired.The cost of the equipment is $210,000.Accumulated depreciation recorded to date is $140,000.Anali has determined, that based on market data, the recoverable amount will be $45,000.Determine the amount of the impairment loss that Anali will be required to record.

Accepted Answer

A) $25,000 
B) $70,000 
C) $45,000 
D) $210,000 
A) $25,000 
B) $70,000 
C) $45,000 
D) $210,000

Question 18

Which of the following statements concerning research and development costs is not true?

Accepted Answer

A) All research costs should be expensed as incurred. 
B) Development costs with probable future benefits should be capitalized. 
C) All development costs should be capitalized. 
D) Development costs associated with successful commercial research would be amortized over the useful life of the product or process developed. 
A) All research costs should be expensed as incurred. 
B) Development costs with probable future benefits should be capitalized. 
C) All development costs should be capitalized. 
D) Development costs associated with successful commercial research would be amortized over the useful life of the product or process developed.

Question 19

On July 1, 2022, 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, 2022, 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 20

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.

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

Which one of the following items is notnotof a truck purchased for business use?

A truck costing $14,000 and on which $12,000 of accumulated depreciation has been recorded was disposed of for $3,000 cash.The entry to record this event would include a

A loss on disposal of an asset is reported in the financial statements

On October 1, 2022, Ming Wo Ltd.places a new asset into service.The cost of the asset is $16,000 with an estimated 5-year life and $4,000 residual value.If Ming Wo uses straight-line depreciation, the depreciation expense for the year ended January 31, 2023 is

Mercy General Hospital installs a new parking lot.The paving cost $25,000 and the lights to illuminate the new parking lot cost $13,000.Which of the following statements is true with respect to these expenditures?

The depreciable amount of property, plant, and equipment is its original cost minus the depreciation for the current year.

Land improvements should be depreciated over the useful life of the

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

An intangible asset should

Property, plant, and equipment are ordinarily presented on the statement of financial position

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported in the Other Income and Expenses section of the statement of income.

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

Under a capital lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Which of the following statements concerning research and development costs is not true?

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

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

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Exam 9: Reporting and Analyzing Long-Lived Assets

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

Which one of the following items is notnotof a truck purchased for business use?

A truck costing $14,000 and on which $12,000 of accumulated depreciation has been recorded was disposed of for $3,000 cash.The entry to record this event would include a

A loss on disposal of an asset is reported in the financial statements

On October 1, 2022, Ming Wo Ltd.places a new asset into service.The cost of the asset is $16,000 with an estimated 5-year life and $4,000 residual value.If Ming Wo uses straight-line depreciation, the depreciation expense for the year ended January 31, 2023 is

Mercy General Hospital installs a new parking lot.The paving cost $25,000 and the lights to illuminate the new parking lot cost $13,000.Which of the following statements is true with respect to these expenditures?

The depreciable amount of property, plant, and equipment is its original cost minus the depreciation for the current year.

Land improvements should be depreciated over the useful life of the

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

An intangible asset should

Property, plant, and equipment are ordinarily presented on the statement of financial position

If land is purchased with a building on it that is to be demolished, proceeds from any salvaged materials are reported in the Other Income and Expenses section of the statement of income.

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

Under a capital lease, both the leased asset and the related lease obligation are shown on the statement of financial position.

Which of the following statements concerning research and development costs is not true?

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

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