Question 1

When an item of property,plant and equipment is sold,the first step is to bring the depreciation up to date.

Accepted Answer

A) True 
 B)False

Question 2

A revaluation decrement increases the carrying amount of an asset.

Accepted Answer

A) True 
 B)False

Question 3

The type of intangible asset related to the rights of original music and media is:

Accepted Answer

A) a patent. 
B) a copyright. 
C) goodwill. 
D) a trademark. 
A) a patent. 
B) a copyright. 
C) goodwill. 
D) a trademark.

Question 4

An asset was purchased for $36,000.The asset's estimated useful life was five years and its residual value was $10,000.The straight-line method of depreciation was used.Calculate the gain or loss on sale if the asset is sold for $19,000 at the end of the first year.

Accepted Answer

A) gain of $5900 
B) no gain or loss 
C) loss of $11,800 
D) gain of $11,800 
A) gain of $5900 
B) no gain or loss 
C) loss of $11,800 
D) gain of $11,800

Question 5

A revaluation decrement will always be debited as an expense in the income statement.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) Land 
B) Copyright 
C) Building 
D) Equipment 
A) Land 
B) Copyright 
C) Building 
D) Equipment

Question 7

Which of the following is TRUE when the estimate of an asset's useful life is increased?

Accepted Answer

A) The new estimate is ignored until the last year of the asset's life. 
B) Annual depreciation expense is decreased for the remaining years of the asset's life. 
C) Annual depreciation expense is increased for the remaining years of the asset's life. 
D) Prior years' financial statements must be restated. 
A) The new estimate is ignored until the last year of the asset's life. 
B) Annual depreciation expense is decreased for the remaining years of the asset's life. 
C) Annual depreciation expense is increased for the remaining years of the asset's life. 
D) Prior years' financial statements must be restated.

Question 8

Which of the following statements about the revaluation model is INCORRECT?

Accepted Answer

A) Revaluation can be upward or downward. 
B) Assets must be revalued every month. 
C) Use of the revaluation method is optional. 
D) The carrying amount of each asset must be maintained at fair value. 
A) Revaluation can be upward or downward. 
B) Assets must be revalued every month. 
C) Use of the revaluation method is optional. 
D) The carrying amount of each asset must be maintained at fair value.

Question 9

A company purchased a computer on 1 July 2016.The computer has an estimated useful life of 5 years and will have no residual value.It was purchased for $10 000.It is estimated that the computer can be used for 5 000 hours.The computer was used for 450 hours during 2016.If the goal is to record higher depreciation expense in the earlier years,which method should be used?

Accepted Answer

A) Units of production 
B) Straight line 
C) First-in,first-out 
D) Reducing balance 
A) Units of production 
B) Straight line 
C) First-in,first-out 
D) Reducing balance

Question 10

The cost of demolishing a building on a parcel of land to build a new building is added to the cost of the land.

Accepted Answer

A) True 
 B)False

Question 11

A building with an original cost of $400 000 and accumulated depreciation of $100 000 is revalued to $500 000.The first step will be to write back the accumulated depreciation.The correct entry will be:

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Building } ( \mathrm { A } + ) & 100000 & \
\hline \text { Accumulated depreciation } ( \mathrm { CA } + ) & & 100000 \
\hline
\end{array}$$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Accumulated depreciation (CA-) } & 100,000 & \
\hline \text { Revaluation surplus (OE+) } & & 100,000 \
\hline
\end{array}$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accumulated depreciation (CA-) } & 100,000 & \
\hline \text { Depreciation expense (E-) } & & 100,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accumulated depreciation (CA-) } & 100,000 & \
\hline \text { Building (A-) } & & 100,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Building } ( \mathrm { A } + ) & 100000 & \
\hline \text { Accumulated depreciation } ( \mathrm { CA } + ) & & 100000 \
\hline
\end{array}$$ 
B)  $\begin{array}{|l|r|r|}
\hline \text { Accumulated depreciation (CA-) } & 100,000 & \
\hline \text { Revaluation surplus (OE+) } & & 100,000 \
\hline
\end{array}$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Accumulated depreciation (CA-) } & 100,000 & \
\hline \text { Depreciation expense (E-) } & & 100,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accumulated depreciation (CA-) } & 100,000 & \
\hline \text { Building (A-) } & & 100,000 \
\hline
\end{array}$$

Question 12

If an asset's physical condition deteriorates more rapidly than would be reflected by normal depreciation,that is referred to as:

Accepted Answer

A) recording error. 
B) accelerated depreciation. 
C) asset disposal. 
D) asset impairment. 
A) recording error. 
B) accelerated depreciation. 
C) asset disposal. 
D) asset impairment.

Question 13

Which of the following should be included in the cost of land?

Accepted Answer

A) Cost of installing fences 
B) Cost to build footpaths on the land 
C) Cost to clear the land of old buildings 
D) Cost of installing signage 
A) Cost of installing fences 
B) Cost to build footpaths on the land 
C) Cost to clear the land of old buildings 
D) Cost of installing signage

Question 14

Depletion would be used for all of the following EXCEPT:

Accepted Answer

A) timber. 
B) retail inventory. 
C) minerals. 
D) oil and gas. 
A) timber. 
B) retail inventory. 
C) minerals. 
D) oil and gas.

Question 15

Which of the following is included in the cost of land?

Accepted Answer

A) The cost of clearing the land 
B) The cost of fencing 
C) The cost of paving 
D) The cost of outdoor lighting 
A) The cost of clearing the land 
B) The cost of fencing 
C) The cost of paving 
D) The cost of outdoor lighting

Question 16

Nobells Ltd purchased a property that included both land and a building for $570,000.The company hired an appraiser who has determined that the market value of the land is $380,000 and that of the building is $430,000.At what amount should the company record the cost of land?

Accepted Answer

A) $158,421 
B) $66,667 
C) $267,407 
D) $285,000 
A) $158,421 
B) $66,667 
C) $267,407 
D) $285,000

Question 17

When an asset is fully depreciated,the residual value must be written off.

Accepted Answer

A) True 
 B)False

Question 18

Albatross Services scrapped a van.The van originally cost $40 000,had an estimated residual value of zero and an estimated life of 10 years.At the time it was scrapped,it was fully depreciated.What was the effect of scrapping the van?

Accepted Answer

A) loss of $1 000 
B) loss of $2 000 
C) no gain or loss 
D) gain of $2 000 
A) loss of $1 000 
B) loss of $2 000 
C) no gain or loss 
D) gain of $2 000

Question 19

Hastings Company has purchased a group of assets for $16,000.The assets and their relative market values are listed below. $$\begin{array} { | l | l | } 
\hline \text { Land } & \$ 11,000 \
\hline \text { Equipment } & 6100 \
\hline \text { Building } & 12,800 \
\hline
\end{array}$$ Which of the following amounts would be debited to the Land account?

Accepted Answer

A) $2092.80 
B) $5886.29 
C) $6849.50 
D) $3264.21 
A) $2092.80 
B) $5886.29 
C) $6849.50 
D) $3264.21

Question 20

When an asset is exchanged between knowledgeable willing parties in an arm's length transaction,the resulting value is called:

Accepted Answer

A) the present value. 
B) the current value. 
C) the fair value. 
D) the replacement value. 
A) the present value. 
B) the current value. 
C) the fair value. 
D) the replacement value.

When an item of property,plant and equipment is sold,the first step is to bring the depreciation up to date.

A revaluation decrement increases the carrying amount of an asset.

The type of intangible asset related to the rights of original music and media is:

An asset was purchased for $36,000.The asset's estimated useful life was five years and its residual value was $10,000.The straight-line method of depreciation was used.Calculate the gain or loss on sale if the asset is sold for $19,000 at the end of the first year.

A revaluation decrement will always be debited as an expense in the income statement.

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

Which of the following is TRUE when the estimate of an asset's useful life is increased?

Which of the following statements about the revaluation model is INCORRECT?

The cost of demolishing a building on a parcel of land to build a new building is added to the cost of the land.

A building with an original cost of $400 000 and accumulated depreciation of $100 000 is revalued to $500 000.The first step will be to write back the accumulated depreciation.The correct entry will be:

If an asset's physical condition deteriorates more rapidly than would be reflected by normal depreciation,that is referred to as:

Which of the following should be included in the cost of land?

Depletion would be used for all of the following EXCEPT:

Which of the following is included in the cost of land?

Nobells Ltd purchased a property that included both land and a building for $570,000.The company hired an appraiser who has determined that the market value of the land is $380,000 and that of the building is $430,000.At what amount should the company record the cost of land?

When an asset is fully depreciated,the residual value must be written off.

Albatross Services scrapped a van.The van originally cost $40 000,had an estimated residual value of zero and an estimated life of 10 years.At the time it was scrapped,it was fully depreciated.What was the effect of scrapping the van?

Hastings Company has purchased a group of assets for $16,000.The assets and their relative market values are listed below. Land \ 11,000 Equipment 6100 Building 12,800 Which of the following amounts would be debited to the Land account?

When an asset is exchanged between knowledgeable willing parties in an arm's length transaction,the resulting value is called:

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

When an item of property,plant and equipment is sold,the first step is to bring the depreciation up to date.

A revaluation decrement increases the carrying amount of an asset.

The type of intangible asset related to the rights of original music and media is:

An asset was purchased for $36,000.The asset's estimated useful life was five years and its residual value was $10,000.The straight-line method of depreciation was used.Calculate the gain or loss on sale if the asset is sold for $19,000 at the end of the first year.

A revaluation decrement will always be debited as an expense in the income statement.

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

Which of the following is TRUE when the estimate of an asset's useful life is increased?

Which of the following statements about the revaluation model is INCORRECT?

The cost of demolishing a building on a parcel of land to build a new building is added to the cost of the land.

A building with an original cost of $400 000 and accumulated depreciation of $100 000 is revalued to $500 000.The first step will be to write back the accumulated depreciation.The correct entry will be:

If an asset's physical condition deteriorates more rapidly than would be reflected by normal depreciation,that is referred to as:

Which of the following should be included in the cost of land?

Depletion would be used for all of the following EXCEPT:

Which of the following is included in the cost of land?

Nobells Ltd purchased a property that included both land and a building for $570,000.The company hired an appraiser who has determined that the market value of the land is $380,000 and that of the building is $430,000.At what amount should the company record the cost of land?

When an asset is fully depreciated,the residual value must be written off.

Albatross Services scrapped a van.The van originally cost $40 000,had an estimated residual value of zero and an estimated life of 10 years.At the time it was scrapped,it was fully depreciated.What was the effect of scrapping the van?

Hastings Company has purchased a group of assets for $16,000.The assets and their relative market values are listed below. Land \ 11,000 Equipment 6100 Building 12,800 Which of the following amounts would be debited to the Land account?

When an asset is exchanged between knowledgeable willing parties in an arm's length transaction,the resulting value is called:

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