Question 1

Long-term assets usually begin with the listing of natural resources first.

Accepted Answer

A) True 
 B)False

Question 2

Which accounting principle dictates whether the cost of a repair should be expensed?

Accepted Answer

A) Conservatism 
B) Entity 
C) Objectivity 
D) Matching 
A) Conservatism 
B) Entity 
C) Objectivity 
D) Matching

Question 3

The costs associated with clearing land and removing buildings are considered land improvements.

Accepted Answer

A) True 
 B)False

Question 4

Lionworks Corporation made a basket purchase of three items.Item X was appraised at $35,000;item Y was appraised at $55,000;and item Z was appraised at $60,000.The purchase price was $125,000.The amount at which item X should be recorded (rounded to the nearest dollar)is:

Accepted Answer

A) $42,000. 
B) $29,167. 
C) $41,667. 
D) $38,043. 
A) $42,000. 
B) $29,167. 
C) $41,667. 
D) $38,043.

Question 5

Expenditures incurred,such as changing the oil and filter on a delivery truck,would be considered ordinary repairs.

Accepted Answer

A) True 
 B)False

Question 6

A company replaced an engine on a vehicle and debited the amount to Repairs and Maintenance expense,rather than debiting the Vehicle account.Which of the following would occur because of this error?

Accepted Answer

A) Repairs expense would be understated. 
B) Net income would be overstated. 
C) Assets would be overstated. 
D) Assets would be understated. 
A) Repairs expense would be understated. 
B) Net income would be overstated. 
C) Assets would be overstated. 
D) Assets would be understated.

Question 7

Costs that should be charged to the land account include:

Accepted Answer

A) the cost of removing unwanted buildings. 
B) paving the parking lot. 
C) installing fences. 
D) the cost of a sign. 
A) the cost of removing unwanted buildings. 
B) paving the parking lot. 
C) installing fences. 
D) the cost of a sign.

Question 8

When calculating depletion,what is the proper treatment of residual value?

Accepted Answer

A) There is no residual value in the calculation of depletion expense. 
B) The residual value is subtracted from cost to determine the depletable base. 
C) The residual value is added to cost to determine the depletable base. 
D) Residual value is ignored until the end of the asset's life at which time it is used to limit the final year's expense amount. 
A) There is no residual value in the calculation of depletion expense. 
B) The residual value is subtracted from cost to determine the depletable base. 
C) The residual value is added to cost to determine the depletable base. 
D) Residual value is ignored until the end of the asset's life at which time it is used to limit the final year's expense amount.

Question 9

Intangible assets have no physical form and therefore are not at risk of becoming obsolete.

Accepted Answer

A) True 
 B)False

Question 10

The fixed asset turnover is the ratio of sales to average fixed assets.

Accepted Answer

A) True 
 B)False

Question 11

Increases in the value of a security while the company still owns it are considered realized gains.

Accepted Answer

A) True 
 B)False

Question 12

Book value is depreciable cost minus accumulated depreciation.

Accepted Answer

A) True 
 B)False

Question 13

The total cost allocated to each item in a basket purchase is based upon:

Accepted Answer

A) the original cost of the items. 
B) their relative market values. 
C) their individual selling price. 
D) their individual market values. 
A) the original cost of the items. 
B) their relative market values. 
C) their individual selling price. 
D) their individual market values.

Question 14

Which would NOT be considered part of land improvements?

Accepted Answer

A) Removing unwanted buildings from the land 
B) Signs 
C) In-ground sprinkler systems 
D) Fencing 
A) Removing unwanted buildings from the land 
B) Signs 
C) In-ground sprinkler systems 
D) Fencing

Question 15

Patents,copyrights,and trademarks are:

Accepted Answer

A) amortized. 
B) depleted. 
C) depreciated. 
D) expensed. 
A) amortized. 
B) depleted. 
C) depreciated. 
D) expensed.

Question 16

Calculating depreciation using a base such as miles driven per year would be an example of double-declining balance depreciation.

Accepted Answer

A) True 
 B)False

Question 17

Custom Closets purchased office fixtures on January 1.The cost was $12,000,and the fixtures had a residual value of $2,000.The fixtures were given a useful life of 8 years.After the end of three years,it was determined that the fixtures would be obsolete in 2 more years and their residual value would still be $2,000.What will be the depreciation under the straight-line method to the nearest dollar be for the fourth year?

Accepted Answer

A) $1,500 
B) $1,250 
C) $3,125 
D) $3,750 
A) $1,500 
B) $1,250 
C) $3,125 
D) $3,750

Question 18

A building was purchased on August 1 for $450,000.It has a salvage value of $38,000 and a useful life of 35 years.To the nearest dollar,how much will the depreciation expense for the building be for the first year ended December 31,using the straight-line method?

Accepted Answer

A) $12,857 
B) $5,357 
C) $4,905 
D) $11,771 
A) $12,857 
B) $5,357 
C) $4,905 
D) $11,771

Question 19

Patents to produce and sell inventions are conveyed by the federal government for a period of:

Accepted Answer

A) 70 years. 
B) 50 years. 
C) 20 years. 
D) time that is agreed upon by the company. 
A) 70 years. 
B) 50 years. 
C) 20 years. 
D) time that is agreed upon by the company.

Question 20

A fixed asset's useful life may be shorter than its physical life due to obsolescence.

Accepted Answer

A) True 
 B)False

Long-term assets usually begin with the listing of natural resources first.

Which accounting principle dictates whether the cost of a repair should be expensed?

The costs associated with clearing land and removing buildings are considered land improvements.

Lionworks Corporation made a basket purchase of three items.Item X was appraised at $35,000;item Y was appraised at $55,000;and item Z was appraised at $60,000.The purchase price was $125,000.The amount at which item X should be recorded (rounded to the nearest dollar)is:

Expenditures incurred,such as changing the oil and filter on a delivery truck,would be considered ordinary repairs.

A company replaced an engine on a vehicle and debited the amount to Repairs and Maintenance expense,rather than debiting the Vehicle account.Which of the following would occur because of this error?

Costs that should be charged to the land account include:

When calculating depletion,what is the proper treatment of residual value?

Intangible assets have no physical form and therefore are not at risk of becoming obsolete.

The fixed asset turnover is the ratio of sales to average fixed assets.

Increases in the value of a security while the company still owns it are considered realized gains.

Book value is depreciable cost minus accumulated depreciation.

The total cost allocated to each item in a basket purchase is based upon:

Which would NOT be considered part of land improvements?

Patents,copyrights,and trademarks are:

Calculating depreciation using a base such as miles driven per year would be an example of double-declining balance depreciation.

A building was purchased on August 1 for $450,000.It has a salvage value of $38,000 and a useful life of 35 years.To the nearest dollar,how much will the depreciation expense for the building be for the first year ended December 31,using the straight-line method?

Patents to produce and sell inventions are conveyed by the federal government for a period of:

A fixed asset's useful life may be shorter than its physical life due to obsolescence.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 8: Long-Term and Other Assets

Long-term assets usually begin with the listing of natural resources first.

Which accounting principle dictates whether the cost of a repair should be expensed?

The costs associated with clearing land and removing buildings are considered land improvements.

Lionworks Corporation made a basket purchase of three items.Item X was appraised at $35,000;item Y was appraised at $55,000;and item Z was appraised at $60,000.The purchase price was $125,000.The amount at which item X should be recorded (rounded to the nearest dollar)is:

Expenditures incurred,such as changing the oil and filter on a delivery truck,would be considered ordinary repairs.

A company replaced an engine on a vehicle and debited the amount to Repairs and Maintenance expense,rather than debiting the Vehicle account.Which of the following would occur because of this error?

Costs that should be charged to the land account include:

When calculating depletion,what is the proper treatment of residual value?

Intangible assets have no physical form and therefore are not at risk of becoming obsolete.

The fixed asset turnover is the ratio of sales to average fixed assets.

Increases in the value of a security while the company still owns it are considered realized gains.

Book value is depreciable cost minus accumulated depreciation.

The total cost allocated to each item in a basket purchase is based upon:

Which would NOT be considered part of land improvements?

Patents,copyrights,and trademarks are:

Calculating depreciation using a base such as miles driven per year would be an example of double-declining balance depreciation.

A building was purchased on August 1 for $450,000.It has a salvage value of $38,000 and a useful life of 35 years.To the nearest dollar,how much will the depreciation expense for the building be for the first year ended December 31,using the straight-line method?

Patents to produce and sell inventions are conveyed by the federal government for a period of:

A fixed asset's useful life may be shorter than its physical life due to obsolescence.

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Current Liabilities and Long-Term Debt

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters