Question 1

Which of the following would be expensed,rather than capitalised?

Accepted Answer

A) Major engine overhaul 
B) Addition to storage capacity 
C) Modification for new use 
D) Oil change and lubrication 
A) Major engine overhaul 
B) Addition to storage capacity 
C) Modification for new use 
D) Oil change and lubrication

Question 2

Which of the following items should be depleted?

Accepted Answer

A) Natural resources 
B) Land 
C) Intangible property 
D) Tangible property,plant and equipment,other than land 
A) Natural resources 
B) Land 
C) Intangible property 
D) Tangible property,plant and equipment,other than land

Question 3

If assets are scrapped before being fully depreciated,there is a loss equal to the carrying amount of the asset.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following depreciation methods allocates an equal amount of depreciation to each year?

Accepted Answer

A) Reducing-balance method 
B) Sum-of-years digits method 
C) Units-of-production method 
D) Straight-line method 
A) Reducing-balance method 
B) Sum-of-years digits method 
C) Units-of-production method 
D) Straight-line method

Question 5

Steel Rolling Company purchased a mine on 1 January 2016 for $529,000 and it is estimated to contain 37,000 tonnes of iron ore.There is no residual value.The company extracted 8500 tonnes of ore in 2016 and 12,800 tonnes of ore in 2017.What is depletion expense for 2017? (Do not round your intermediate calculations. )

Accepted Answer

A) $183,005 
B) $143,527 
C) $153,005 
D) $122,527 
A) $183,005 
B) $143,527 
C) $153,005 
D) $122,527

Question 6

Which of the following accounting principles requires depreciation?

Accepted Answer

A) The reliability principle 
B) The matching principle 
C) The entity concept 
D) The profit recognition principle 
A) The reliability principle 
B) The matching principle 
C) The entity concept 
D) The profit recognition principle

Question 7

Acer Investments plans to develop a shopping centre.In the first quarter,it spent the following amounts: $\begin{array}{|l|l|}
\hline\text { Purchase price of land } & \$ 17,000 \
\hline \text { Surveys and legal fees } & 500 \
\hline \text { Land clearing } & 1100 \
\hline \text { Fencing } & 3000 \
\hline \text { Install lighting and signage } & 1060\\hline
\end{array}$ What amount should be recorded as the cost of land in the books of the company?

Accepted Answer

A) $19,760 
B) $26,100 
C) $18,700 
D) $26,700 
A) $19,760 
B) $26,100 
C) $18,700 
D) $26,700

Question 8

Land that cost $500 000 is revalued to $600 000.The journal entry would be:

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Land } ( \mathrm { A } + ) & 600000 & \
\hline \text { Revaluation surplus } ( \mathrm { OE } + ) & & 600000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Land } ( \mathrm { A } + ) & 100000 & \
\hline \text { Revaluation Revenue } ( \mathrm { R } + ) & & 100000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Revaluation surplus (OE-) } & 100000 & \
\hline \text { Land (A-) } & & 100000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Land } ( \mathrm { A } + ) & 100000 & \
\hline \text { Revaluation surplus } ( \mathrm { OE } + ) & & 100000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Land } ( \mathrm { A } + ) & 600000 & \
\hline \text { Revaluation surplus } ( \mathrm { OE } + ) & & 600000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Land } ( \mathrm { A } + ) & 100000 & \
\hline \text { Revaluation Revenue } ( \mathrm { R } + ) & & 100000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Revaluation surplus (OE-) } & 100000 & \
\hline \text { Land (A-) } & & 100000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Land } ( \mathrm { A } + ) & 100000 & \
\hline \text { Revaluation surplus } ( \mathrm { OE } + ) & & 100000 \
\hline
\end{array}$$

Question 9

Which of the following is the proper accounting treatment for purchased goodwill?

Accepted Answer

A) Goodwill must be expensed when acquired. 
B) Goodwill must be capitalised when acquired and amortised over 70 years or less. 
C) Goodwill must be capitalised when acquired and amortised over 20 years or less. 
D) Goodwill must be capitalised when acquired and expensed each year to the extent that the value has declined. 
A) Goodwill must be expensed when acquired. 
B) Goodwill must be capitalised when acquired and amortised over 70 years or less. 
C) Goodwill must be capitalised when acquired and amortised over 20 years or less. 
D) Goodwill must be capitalised when acquired and expensed each year to the extent that the value has declined.

Question 10

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

Accepted Answer

A) Machinery and equipment 
B) Buildings 
C) Land 
D) Land improvements 
A) Machinery and equipment 
B) Buildings 
C) Land 
D) Land improvements

Question 11

Which of the following intangible assets bars other manufacturers from using the same name for a product?

Accepted Answer

A) Patent 
B) Trademark 
C) Copyright 
D) Franchise 
A) Patent 
B) Trademark 
C) Copyright 
D) Franchise

Question 12

Which of the following is NOT a characteristic of an item of property,plant and equipment?

Accepted Answer

A) The asset has physical form. 
B) The asset is available for sale to customers in the ordinary course of business. 
C) The asset is used in the production of income for the business. 
D) The asset has future usefulness and value. 
A) The asset has physical form. 
B) The asset is available for sale to customers in the ordinary course of business. 
C) The asset is used in the production of income for the business. 
D) The asset has future usefulness and value.

Question 13

Which of the following types of expenses result from a decline in the utility of an intangible asset?

Accepted Answer

A) Depreciation 
B) Amortisation 
C) Depletion 
D) Obsolescence 
A) Depreciation 
B) Amortisation 
C) Depletion 
D) Obsolescence

Question 14

Depletion is the word we use instead of depreciation to attach to recovering the cost of natural resources.

Accepted Answer

A) True 
 B)False

Question 15

Which would NOT be accounted for by the depletion method?

Accepted Answer

A) Oil reserves 
B) Coal reserves 
C) Timber reserves 
D) Land 
A) Oil reserves 
B) Coal reserves 
C) Timber reserves 
D) Land

Question 16

Revaluation increases and decreases must always be offset against each other.

Accepted Answer

A) True 
 B)False

Question 17

The straight-line method of depreciation assigns a fixed amount of depreciation to each unit of output produced by an asset.

Accepted Answer

A) True 
 B)False

Question 18

If goodwill decreases,the company records a loss and writes down the value of the goodwill.

Accepted Answer

A) True 
 B)False

Question 19

Asset impairments occur when the asset's value has a significant decline,outside of normal depreciation.

Accepted Answer

A) True 
 B)False

Question 20

The depreciation method in which residual value is ignored until the end of the life of the asset is:

Accepted Answer

A) units of output. 
B) reducing balance. 
C) First-in,first-out. 
D) straight line. 
A) units of output. 
B) reducing balance. 
C) First-in,first-out. 
D) straight line.

Which of the following would be expensed,rather than capitalised?

Which of the following items should be depleted?

If assets are scrapped before being fully depreciated,there is a loss equal to the carrying amount of the asset.

Which of the following depreciation methods allocates an equal amount of depreciation to each year?

Which of the following accounting principles requires depreciation?

Land that cost $500 000 is revalued to $600 000.The journal entry would be:

Which of the following is the proper accounting treatment for purchased goodwill?

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

Which of the following intangible assets bars other manufacturers from using the same name for a product?

Which of the following is NOT a characteristic of an item of property,plant and equipment?

Which of the following types of expenses result from a decline in the utility of an intangible asset?

Depletion is the word we use instead of depreciation to attach to recovering the cost of natural resources.

Which would NOT be accounted for by the depletion method?

Revaluation increases and decreases must always be offset against each other.

The straight-line method of depreciation assigns a fixed amount of depreciation to each unit of output produced by an asset.

If goodwill decreases,the company records a loss and writes down the value of the goodwill.

Asset impairments occur when the asset's value has a significant decline,outside of normal depreciation.

The depreciation method in which residual value is ignored until the end of the life of the asset is:

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

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Exam 10: Non-Current Assets: Property, Plant and Equipment, and Intangibles

Which of the following would be expensed,rather than capitalised?

Which of the following items should be depleted?

If assets are scrapped before being fully depreciated,there is a loss equal to the carrying amount of the asset.

Which of the following depreciation methods allocates an equal amount of depreciation to each year?

Which of the following accounting principles requires depreciation?

Land that cost $500 000 is revalued to $600 000.The journal entry would be:

Which of the following is the proper accounting treatment for purchased goodwill?

Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?

Which of the following intangible assets bars other manufacturers from using the same name for a product?

Which of the following is NOT a characteristic of an item of property,plant and equipment?

Which of the following types of expenses result from a decline in the utility of an intangible asset?

Depletion is the word we use instead of depreciation to attach to recovering the cost of natural resources.

Which would NOT be accounted for by the depletion method?

Revaluation increases and decreases must always be offset against each other.

The straight-line method of depreciation assigns a fixed amount of depreciation to each unit of output produced by an asset.

If goodwill decreases,the company records a loss and writes down the value of the goodwill.

Asset impairments occur when the asset's value has a significant decline,outside of normal depreciation.

The depreciation method in which residual value is ignored until the end of the life of the asset is:

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters