Question 1

Which of the following accurately describes the treatment of ordinary and extraordinary repairs?

Accepted Answer

A) Ordinary repairs are expensed as incurred;extraordinary repairs are expensed as incurred. 
B) Ordinary repairs are treated as a capital expenditure;extraordinary repairs are expensed as incurred. 
C) Ordinary repairs are expensed as incurred;extraordinary repairs are treated as a capital expenditure. 
D) Ordinary repairs are treated as a capital expenditure;extraordinary repairs are treated as a capital expenditure. 
A) Ordinary repairs are expensed as incurred;extraordinary repairs are expensed as incurred. 
B) Ordinary repairs are treated as a capital expenditure;extraordinary repairs are expensed as incurred. 
C) Ordinary repairs are expensed as incurred;extraordinary repairs are treated as a capital expenditure. 
D) Ordinary repairs are treated as a capital expenditure;extraordinary repairs are treated as a capital expenditure.

Question 2

On January 1,2017,Busy Beaver bought a new industrial lathe for $210,000.It expects to use the lathe for 10,000 hours over the next 5 years and then sell it for $10,000.Busy Beaver used the lathe for 2,000 hours in 2017 and 2,500 hours in 2018.Accumulated Depreciation at December 31,2018,using units-of-production,equals:

Accepted Answer

A) $50,000. 
B) $120,000. 
C) $90,000. 
D) $80,000. 
A) $50,000. 
B) $120,000. 
C) $90,000. 
D) $80,000.

Question 3

On January 1,Luke Denton Co.purchased a truck for $125,000 which has an estimated productive life of 100,000 miles.Its residual value is $12,500.During the first full year of its useful life,the company drove the truck 25,000 miles.Its depreciation expense for the year using the units of production method is:

Accepted Answer

A) $22,500. 
B) $25,000. 
C) $28,125. 
D) $31,250. 
A) $22,500. 
B) $25,000. 
C) $28,125. 
D) $31,250.

Question 4

On January 1,2017,Whittle,Inc.purchased timber rights for $1,500,000.It is expected to produce a total of 2,000,000 cords of wood over 4 years.The cords of wood cut were 200,000 in 2017.The effect of recording the 2017 depletion (not the sale of the wood)on the accounting equation is:

Accepted Answer

A) total assets remain unchanged. 
B) total stockholders' equity decreases. 
C) total assets decrease. 
D) total liabilities increase. 
A) total assets remain unchanged. 
B) total stockholders' equity decreases. 
C) total assets decrease. 
D) total liabilities increase.

Question 5

Fixed assets are ________ and are found on the ________:

Accepted Answer

A) long-lived tangible assets;balance sheet 
B) long-lived intangible assets;balance sheet 
C) current tangible assets;balance sheet 
D) current intangible assets;income statement 
A) long-lived tangible assets;balance sheet 
B) long-lived intangible assets;balance sheet 
C) current tangible assets;balance sheet 
D) current intangible assets;income statement

Question 6

Which of the following depreciation methods is used by most corporations to calculate depreciation expense for their tax returns?

Accepted Answer

A) MACRS 
B) Straight-line 
C) Units-of-production 
D) Double-declining balance 
A) MACRS 
B) Straight-line 
C) Units-of-production 
D) Double-declining balance

Question 7

Morris Lest,Inc.sold its delivery truck for $500 more than its book value.The sale will result in a(n):

Accepted Answer

A) increase in net income on the income statement. 
B) increase in Cost of Goods Sold on the income statement. 
C) decrease in gross profit on the income statement. 
D) decrease in Accounts Payable on the balance sheet. 
A) increase in net income on the income statement. 
B) increase in Cost of Goods Sold on the income statement. 
C) decrease in gross profit on the income statement. 
D) decrease in Accounts Payable on the balance sheet.

Question 8

On September 1,2018,Acme,Inc,sold its sales manager's company car.The car was purchased in 2011 and was not yet fully depreciated.How many months of depreciation expense should Acme record on the car for the year ended December 31,2018?

Accepted Answer

A) 9 
B) 12 
C) 8 
D) 0 
A) 9 
B) 12 
C) 8 
D) 0

Question 9

Which of these are natural resources that are depleted over time?

Accepted Answer

A) Timber 
B) Mining equipment 
C) Cash 
D) Inventory 
A) Timber 
B) Mining equipment 
C) Cash 
D) Inventory

Question 10

The fixed asset turnover ratio is used to evaluate:

Accepted Answer

A) how well management uses long-lived tangible assets to generate revenues. 
B) whether there are enough fixed assets to pay its current liabilities. 
C) the frequency in which fixed assets are sold. 
D) the proportion of fixed assets relative to total assets. 
A) how well management uses long-lived tangible assets to generate revenues. 
B) whether there are enough fixed assets to pay its current liabilities. 
C) the frequency in which fixed assets are sold. 
D) the proportion of fixed assets relative to total assets.

Question 11

Olivia Taylor Co.built three houses for a total cost of $192,000.Appraisal values for the three completed houses were: white house,$48,000,blue house $72,000,and green house $120,000.Using the basket purchase allocation,the recorded value of the green house should be:

Accepted Answer

A) $96,000. 
B) $120,000. 
C) $64,000. 
D) $80,000. 
A) $96,000. 
B) $120,000. 
C) $64,000. 
D) $80,000.

Question 12

When a company capitalizes a cost,its ________ increase.

Accepted Answer

A) long-lived assets 
B) liabilities 
C) expenses 
D) revenues 
A) long-lived assets 
B) liabilities 
C) expenses 
D) revenues

Question 13

Sheridan Manufacturing purchased a new building with the surrounding land.The price paid was $2,400,000,including the commission charged on the sale.An appraisal of the land and building at the time of purchase indicated that the market value of the land was $2,000,000 and the market value of the building was $1,000,000.What amounts would be recorded for the purchase of the two assets?

Accepted Answer

A) Land $1,600,000,Building $800,000 
B) Land $2,000,000,Building $1,000,000 
C) Land $2,000,000,Building $400,000 
D) Land $1,400,000,Building $1,000,000 
A) Land $1,600,000,Building $800,000 
B) Land $2,000,000,Building $1,000,000 
C) Land $2,000,000,Building $400,000 
D) Land $1,400,000,Building $1,000,000

Question 14

Match each asset with the appropriate category.
-Land

Accepted Answer

A) I - Intangible long-lived asset 
B) N - Not a long-lived asset 
C) T - Tangible long-lived asset 
A) I - Intangible long-lived asset 
B) N - Not a long-lived asset 
C) T - Tangible long-lived asset

Question 15

Larkspur,Inc.paid $82,000 cash for piece of land to be used for a new corporate headquarters building.What is the effect of this transaction on the accounting equation?

Accepted Answer

A) One asset increases,while another asset decreases. 
B) Total assets increase and total liabilities increase. 
C) Total assets increase and total stockholders' equity increases. 
D) Total assets decrease and total liabilities decrease. 
A) One asset increases,while another asset decreases. 
B) Total assets increase and total liabilities increase. 
C) Total assets increase and total stockholders' equity increases. 
D) Total assets decrease and total liabilities decrease.

Question 16

Orangewood Industries bought a new cash register for $7,500.Ace plans to use the cash register for 4 years and then sell it for $600.The cash register's depreciable cost equals:

Accepted Answer

A) $7,500. 
B) $600. 
C) $1,725. 
D) $6,900. 
A) $7,500. 
B) $600. 
C) $1,725. 
D) $6,900.

Question 17

In recording the acquisition cost of an entire business:

Accepted Answer

A) goodwill is recorded as the excess of cost over the fair value of identifiable net assets. 
B) assets are recorded at the seller's book values. 
C) goodwill,if it exists,is never recorded. 
D) goodwill is recorded as the excess of cost over the book value of identifiable net assets. 
A) goodwill is recorded as the excess of cost over the fair value of identifiable net assets. 
B) assets are recorded at the seller's book values. 
C) goodwill,if it exists,is never recorded. 
D) goodwill is recorded as the excess of cost over the book value of identifiable net assets.

Question 18

Match each asset with the appropriate category.
-Goodwill

Accepted Answer

A) I - Intangible long-lived asset 
B) N - Not a long-lived asset 
C) T - Tangible long-lived asset 
A) I - Intangible long-lived asset 
B) N - Not a long-lived asset 
C) T - Tangible long-lived asset

Question 19

Match each term with the appropriate definition.Not all definitions will be used.
-Useful life

Accepted Answer

A) Net sales revenue divided by average net fixed assets. 
B) Costs that are expensed in the period incurred. 
C) A contractual agreement that allows limited permission for use of a property. 
D) Net income divided by average total assets. 
E) An estimate of how long a tangible asset will last before it physically wears out.
F)Asset cost minus residual value.
G)Costs that are recorded as revenues.
H)An estimate of how long a company will use a particular asset.
I)Allocating the cost of tangible assets over their limited useful life.
J)A cumulative record of depreciation expense,accumulated depreciation and book value.
K)Asset cost minus accumulated depreciation.
L)Grants the exclusive right to sell or use a creative work.
M)The method whereby different parts of an asset may be depreciated over different useful lives under IFRS.
N)The principle that companies wish to pay the lowest possible tax at the last possible time.
O)Allocating the cost of intangible assets over their limited useful life. 
A) Net sales revenue divided by average net fixed assets. 
B) Costs that are expensed in the period incurred. 
C) A contractual agreement that allows limited permission for use of a property. 
D) Net income divided by average total assets. 
E) An estimate of how long a tangible asset will last before it physically wears out.
F)Asset cost minus residual value.
G)Costs that are recorded as revenues.
H)An estimate of how long a company will use a particular asset.
I)Allocating the cost of tangible assets over their limited useful life.
J)A cumulative record of depreciation expense,accumulated depreciation and book value.
K)Asset cost minus accumulated depreciation.
L)Grants the exclusive right to sell or use a creative work.
M)The method whereby different parts of an asset may be depreciated over different useful lives under IFRS.
N)The principle that companies wish to pay the lowest possible tax at the last possible time.
O)Allocating the cost of intangible assets over their limited useful life.

Question 20

The book value of a long-lived tangible asset is equal to:

Accepted Answer

A) its acquisition cost less the accumulated depreciation from the acquisition date to the balance sheet date. 
B) its acquisition cost plus accumulated depreciation from the acquisition date to the balance sheet date. 
C) the amount that could be obtained for the asset on the balance sheet date if it were sold. 
D) the annual cost of carrying the asset in inventory. 
A) its acquisition cost less the accumulated depreciation from the acquisition date to the balance sheet date. 
B) its acquisition cost plus accumulated depreciation from the acquisition date to the balance sheet date. 
C) the amount that could be obtained for the asset on the balance sheet date if it were sold. 
D) the annual cost of carrying the asset in inventory.

Which of the following accurately describes the treatment of ordinary and extraordinary repairs?

On January 1,2017,Whittle,Inc.purchased timber rights for $1,500,000.It is expected to produce a total of 2,000,000 cords of wood over 4 years.The cords of wood cut were 200,000 in 2017.The effect of recording the 2017 depletion (not the sale of the wood)on the accounting equation is:

Fixed assets are and are found on the :

Which of the following depreciation methods is used by most corporations to calculate depreciation expense for their tax returns?

Morris Lest,Inc.sold its delivery truck for $500 more than its book value.The sale will result in a(n):

On September 1,2018,Acme,Inc,sold its sales manager's company car.The car was purchased in 2011 and was not yet fully depreciated.How many months of depreciation expense should Acme record on the car for the year ended December 31,2018?

Which of these are natural resources that are depleted over time?

The fixed asset turnover ratio is used to evaluate:

Olivia Taylor Co.built three houses for a total cost of $192,000.Appraisal values for the three completed houses were: white house,$48,000,blue house $72,000,and green house $120,000.Using the basket purchase allocation,the recorded value of the green house should be:

When a company capitalizes a cost,its ________ increase.

Match each asset with the appropriate category. -Land

Larkspur,Inc.paid $82,000 cash for piece of land to be used for a new corporate headquarters building.What is the effect of this transaction on the accounting equation?

Orangewood Industries bought a new cash register for $7,500.Ace plans to use the cash register for 4 years and then sell it for $600.The cash register's depreciable cost equals:

In recording the acquisition cost of an entire business:

Match each asset with the appropriate category. -Goodwill

Match each term with the appropriate definition.Not all definitions will be used. -Useful life

The book value of a long-lived tangible asset is equal to:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 9: Long-Lived Tangible and Intangible Assets

Which of the following accurately describes the treatment of ordinary and extraordinary repairs?

On January 1,2017,Whittle,Inc.purchased timber rights for $1,500,000.It is expected to produce a total of 2,000,000 cords of wood over 4 years.The cords of wood cut were 200,000 in 2017.The effect of recording the 2017 depletion (not the sale of the wood)on the accounting equation is:

Fixed assets are ________ and are found on the ________:

Which of the following depreciation methods is used by most corporations to calculate depreciation expense for their tax returns?

Morris Lest,Inc.sold its delivery truck for $500 more than its book value.The sale will result in a(n):

On September 1,2018,Acme,Inc,sold its sales manager's company car.The car was purchased in 2011 and was not yet fully depreciated.How many months of depreciation expense should Acme record on the car for the year ended December 31,2018?

Which of these are natural resources that are depleted over time?

The fixed asset turnover ratio is used to evaluate:

Olivia Taylor Co.built three houses for a total cost of $192,000.Appraisal values for the three completed houses were: white house,$48,000,blue house $72,000,and green house $120,000.Using the basket purchase allocation,the recorded value of the green house should be:

When a company capitalizes a cost,its ________ increase.

Match each asset with the appropriate category. -Land

Larkspur,Inc.paid $82,000 cash for piece of land to be used for a new corporate headquarters building.What is the effect of this transaction on the accounting equation?

Orangewood Industries bought a new cash register for $7,500.Ace plans to use the cash register for 4 years and then sell it for $600.The cash register's depreciable cost equals:

In recording the acquisition cost of an entire business:

Match each asset with the appropriate category. -Goodwill

Match each term with the appropriate definition.Not all definitions will be used. -Useful life

The book value of a long-lived tangible asset is equal to:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Fixed assets are and are found on the :