Question 1

When an entire business is purchased, goodwill is the excess of cost over the book value of the net assets acquired.

Accepted Answer

A) True 
 B)False

Question 2

Capital expenditures are expenditures that increase the company's investment in productive facilities.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not an intangible asset arising from a government grant?

Accepted Answer

A) Goodwill 
B) Patent 
C) Trademark 
D) Trade name 
A) Goodwill 
B) Patent 
C) Trademark 
D) Trade name

Question 4

All of the following are intangible assets except

Accepted Answer

A) copyrights. 
B) goodwill. 
C) patents. 
D) research and development costs. 
A) copyrights. 
B) goodwill. 
C) patents. 
D) research and development costs.

Question 5

Research and development costs

Accepted Answer

A) Are expenditures that may lead to patents, copyrights, and new products. 
B) Development costs incurred after technological feasibility has been achieved are capitalized and reported on the statement of financial position as an intangible asset. 
C) Costs incurred in the research phase are always expenses as incurred. 
D) All of the choices are correct regarding research and development costs. 
A) Are expenditures that may lead to patents, copyrights, and new products. 
B) Development costs incurred after technological feasibility has been achieved are capitalized and reported on the statement of financial position as an intangible asset. 
C) Costs incurred in the research phase are always expenses as incurred. 
D) All of the choices are correct regarding research and development costs.

Question 6

Depreciation is a process of

Accepted Answer

A) asset devaluation. 
B) cost accumulation. 
C) cost allocation. 
D) asset valuation. 
A) asset devaluation. 
B) cost accumulation. 
C) cost allocation. 
D) asset valuation.

Question 7

258
On January 1, 2011, Lakeside Enterprises purchased natural resources for $1,800,000.The company expects the resources to produce 12,000,000 units of product.(1) What is the depletion cost per unit? (2) If the company mined and sold 20,000 units in January, what is depletion expense for the month?

Accepted Answer

The answer of 258
On January 1, 2011, Lakeside Enterprises purchased...

Question 8

Mento,Inc.spent $3,000,000 during 2011 to repair and update its plant assets.Mento spent $1,200,000 to paint the building, $230,000 to place worn-out gears on motors, $640,000 to install special shelving that will increase operating efficiency in the plant, and $930,000 on new machinery.What amount of these costs would appear as assets on Mento, Inc.'s December 31, 2011 statement of financial position?

Accepted Answer

A) $3,000,000 
B) $1,570,000 
C) $1,430,000 
D) $2,770,000 
A) $3,000,000 
B) $1,570,000 
C) $1,430,000 
D) $2,770,000

Question 9

Goodwill is not recognized in accounting unless it is acquired from another business enterprise.

Accepted Answer

A) True 
 B)False

Question 10

An exchange of plant assets has commercial substance if the future cash flows change as a result of the exchange.

Accepted Answer

A) True 
 B)False

Question 11

Match the items below by entering the appropriate code letter in the space provided.

Accepted Answer

The answer of Match the items below by entering the...

Question 12

The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is

Accepted Answer

A) straight-line. 
B) units-of-activity. 
C) declining-balance. 
D) none of these. 
A) straight-line. 
B) units-of-activity. 
C) declining-balance. 
D) none of these.

Question 13

Depletion is

Accepted Answer

A) a decrease in fair value of natural resources. 
B) the amount of spoilage that occurs when natural resources are extracted. 
C) the allocation of the cost of natural resources to expense. 
D) the method used to record unsuccessful patents. 
A) a decrease in fair value of natural resources. 
B) the amount of spoilage that occurs when natural resources are extracted. 
C) the allocation of the cost of natural resources to expense. 
D) the method used to record unsuccessful patents.

Question 14

An asset that cannot be sold individually in the market place is

Accepted Answer

A) a patent. 
B) goodwill. 
C) a copyright. 
D) a trade name. 
A) a patent. 
B) goodwill. 
C) a copyright. 
D) a trade name.

Question 15

Additions and improvements

Accepted Answer

A) occur frequently during the ownership of a plant asset. 
B) normally involve immaterial expenditures. 
C) increase the book value of plant assets when incurred. 
D) typically only benefit the current accounting period. 
A) occur frequently during the ownership of a plant asset. 
B) normally involve immaterial expenditures. 
C) increase the book value of plant assets when incurred. 
D) typically only benefit the current accounting period.

Question 16

Equipment costing $60,000 with a residual value of $12,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years.Assuming a revised estimated total life of 5 years and no change in the residual value, the depreciation expense for year 3 would be

Accepted Answer

A) $7,200. 
B) $16,000. 
C) $12,000. 
D) $9,,600. 
A) $7,200. 
B) $16,000. 
C) $12,000. 
D) $9,,600.

Question 17

IFRS allows companies to revalue plant assets to fair value.Which of the following statements is true regarding revaluation?

Accepted Answer

A) At the time a company purchases an asset it must decide whether to follow revaluation procedures for the asset; once the election is made, it must be followed for the remainder of the asset's useful life. 
B) Assets that are experiencing rapid price changes must be revalued quarterly, other assets can be revalued on an annual basis. 
C) The journal entry to record a revaluation when the asset's price has increased includes a credit to the account revaluation surplus. 
D) All of the choices are correct regarding revaluation of plant assets. 
A) At the time a company purchases an asset it must decide whether to follow revaluation procedures for the asset; once the election is made, it must be followed for the remainder of the asset's useful life. 
B) Assets that are experiencing rapid price changes must be revalued quarterly, other assets can be revalued on an annual basis. 
C) The journal entry to record a revaluation when the asset's price has increased includes a credit to the account revaluation surplus. 
D) All of the choices are correct regarding revaluation of plant assets.

Question 18

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

Accepted Answer

A) in the Operating expenses section of the income statement. 
B) in the Other income and expense section of the income statement. 
C) as a direct increase to the retained earnings account on the statement of financial position. 
D) as a direct decrease to the retained earnings account on the statement of financial position. 
A) in the Operating expenses section of the income statement. 
B) in the Other income and expense section of the income statement. 
C) as a direct increase to the retained earnings account on the statement of financial position. 
D) as a direct decrease to the retained earnings account on the statement of financial position.

Question 19

A change in the estimated useful life of equipment requires

Accepted Answer

A) a retroactive change in the amount of periodic depreciation recognized in previous years. 
B) that no change be made in the periodic depreciation so that depreciation amounts are comparable over the life of the asset. 
C) that the amount of periodic depreciation be changed in the current year and in future years. 
D) that income for the current year be increased. 
A) a retroactive change in the amount of periodic depreciation recognized in previous years. 
B) that no change be made in the periodic depreciation so that depreciation amounts are comparable over the life of the asset. 
C) that the amount of periodic depreciation be changed in the current year and in future years. 
D) that income for the current year be increased.

Question 20

Under U.S.GAAP

Accepted Answer

A) Property, plant, and equipment may not be revalued. 
B) Component depreciation is not required. 
C) Research and development costs are expensed as incurred. 
D) All of the choices are correct. 
A) Property, plant, and equipment may not be revalued. 
B) Component depreciation is not required. 
C) Research and development costs are expensed as incurred. 
D) All of the choices are correct.

When an entire business is purchased, goodwill is the excess of cost over the book value of the net assets acquired.

Capital expenditures are expenditures that increase the company's investment in productive facilities.

Which of the following is not an intangible asset arising from a government grant?

All of the following are intangible assets except

Research and development costs

Depreciation is a process of

Goodwill is not recognized in accounting unless it is acquired from another business enterprise.

An exchange of plant assets has commercial substance if the future cash flows change as a result of the exchange.

Match the items below by entering the appropriate code letter in the space provided.

The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is

Depletion is

An asset that cannot be sold individually in the market place is

Additions and improvements

Equipment costing $60,000 with a residual value of $12,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years.Assuming a revised estimated total life of 5 years and no change in the residual value, the depreciation expense for year 3 would be

IFRS allows companies to revalue plant assets to fair value.Which of the following statements is true regarding revaluation?

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

A change in the estimated useful life of equipment requires

Under U.S.GAAP

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters

Exam 9: Plant Assets, Natural Resources, and Intangible Assets

When an entire business is purchased, goodwill is the excess of cost over the book value of the net assets acquired.

Capital expenditures are expenditures that increase the company's investment in productive facilities.

Which of the following is not an intangible asset arising from a government grant?

All of the following are intangible assets except

Research and development costs

Depreciation is a process of

Goodwill is not recognized in accounting unless it is acquired from another business enterprise.

An exchange of plant assets has commercial substance if the future cash flows change as a result of the exchange.

Match the items below by entering the appropriate code letter in the space provided.

The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is

Depletion is

An asset that cannot be sold individually in the market place is

Additions and improvements

Equipment costing $60,000 with a residual value of $12,000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years.Assuming a revised estimated total life of 5 years and no change in the residual value, the depreciation expense for year 3 would be

IFRS allows companies to revalue plant assets to fair value.Which of the following statements is true regarding revaluation?

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

A change in the estimated useful life of equipment requires

Under U.S.GAAP

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters