Question 1

Normal expenditures for repairs and maintenance should be capitalised.

Accepted Answer

A) True 
 B)False

Question 2

A loss occurs on the exchange of an item of property,plant and equipment if the market value of the new asset received is greater than the total amount given up in the exchange.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is the amount capitalised as goodwill?

Accepted Answer

A) The excess of the cost of an acquired company over the sum of the market value of its net assets 
B) The excess of the cost of an acquired company over the sum of the carrying amount of its net assets 
C) The excess of the cost of an acquired company over the sum of the market value of its assets 
D) The excess of the cost of an acquired company over the sum of the carrying amount of its assets 
A) The excess of the cost of an acquired company over the sum of the market value of its net assets 
B) The excess of the cost of an acquired company over the sum of the carrying amount of its net assets 
C) The excess of the cost of an acquired company over the sum of the market value of its assets 
D) The excess of the cost of an acquired company over the sum of the carrying amount of its assets

Question 4

To determine if there is a gain or loss on the sale of an asset,you must compare:

Accepted Answer

A) sales price and original cost. 
B) sales price and residual value. 
C) sales price and carrying amount. 
D) carrying amount and residual cost. 
A) sales price and original cost. 
B) sales price and residual value. 
C) sales price and carrying amount. 
D) carrying amount and residual cost.

Question 5

Plant and equipment are more likely to decrease in value than increase.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following items is included in the journal entry if a company sells equipment at a price less than its carrying amount?

Accepted Answer

A) a credit to Accumulated depreciation 
B) a credit to Gain on sale of equipment 
C) a debit to Loss on sale of equipment 
D) a debit to Equipment for its carrying amount 
A) a credit to Accumulated depreciation 
B) a credit to Gain on sale of equipment 
C) a debit to Loss on sale of equipment 
D) a debit to Equipment for its carrying amount

Question 7

A company's accountant expenses a payment that should be capitalised.Which of the following is TRUE?

Accepted Answer

A) Liabilities are overstated. 
B) Revenue is overstated. 
C) Assets are overstated. 
D) Profit is understated. 
A) Liabilities are overstated. 
B) Revenue is overstated. 
C) Assets are overstated. 
D) Profit is understated.

Question 8

On 1 October 2016,Nurix Company purchased a patent for $200,000 cash.Although the patent gives legal protection for 20 years,the patent is expected to be used for only 10 years.What will be the balance in the patent account on 30 September 2017?

Accepted Answer

A) $190,000 
B) $180,000 
C) $100,000 
D) $200,000 
A) $190,000 
B) $180,000 
C) $100,000 
D) $200,000

Question 9

If the sales price of an item of property,plant and equipment is lower than the carrying amount,there will be a loss on sale.

Accepted Answer

A) True 
 B)False

Question 10

A company's accountant capitalises a payment that should be recorded as an expense.Which of the following is TRUE?

Accepted Answer

A) Assets are overstated. 
B) Expenses are overstated. 
C) Liabilities are overstated. 
D) Revenue is overstated. 
A) Assets are overstated. 
B) Expenses are overstated. 
C) Liabilities are overstated. 
D) Revenue is overstated.

Question 11

Which of the following items should be depreciated?

Accepted Answer

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

Question 12

A coal mine costs $1,008,000 and is estimated to hold 51,000 tonnes of coal.There is no residual value.10,000 tonnes are extracted and sold during the first year of operations.Calculate depletion per unit.

Accepted Answer

A) $19.76 
B) $14.82 
C) $9.88 
D) $4.94 
A) $19.76 
B) $14.82 
C) $9.88 
D) $4.94

Question 13

A revaluation increment will always be credited to revenue account.

Accepted Answer

A) True 
 B)False

Question 14

On 1 January 2016,Portwell Company purchased a patent for $200 000.It estimates a useful life of four years.At the end of 2016,the Patent account will have a debit balance of $200 000 and there will be a credit balance in the Accumulated amortisation account of $50 000.

Accepted Answer

A) True 
 B)False

Question 15

Expenditures that extend the life of an asset or increase its productive capacity should be expensed.

Accepted Answer

A) True 
 B)False

Question 16

When an asset is fully depreciated,no further depreciation expense is recorded.

Accepted Answer

A) True 
 B)False

Question 17

The most common asset to revalue downwards is land.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following assets is NOT an intangible asset?

Accepted Answer

A) Goodwill 
B) Patent 
C) Building 
D) Trademark 
A) Goodwill 
B) Patent 
C) Building 
D) Trademark

Question 19

A photocopy machine costs $99,000 when new and has accumulated depreciation of $92,000.Suppose the company junks this machine and receives nothing.What is the result of the disposal transaction?

Accepted Answer

A) gain of $7000 
B) no gain or loss 
C) loss of $11,500 
D) loss of $7000 
A) gain of $7000 
B) no gain or loss 
C) loss of $11,500 
D) loss of $7000

Question 20

When an item of property,plant and equipment is sold,if the carrying amount is higher than the sales price,there will be a loss on sale.

Accepted Answer

A) True 
 B)False

Normal expenditures for repairs and maintenance should be capitalised.

A loss occurs on the exchange of an item of property,plant and equipment if the market value of the new asset received is greater than the total amount given up in the exchange.

Which of the following is the amount capitalised as goodwill?

To determine if there is a gain or loss on the sale of an asset,you must compare:

Plant and equipment are more likely to decrease in value than increase.

Which of the following items is included in the journal entry if a company sells equipment at a price less than its carrying amount?

A company's accountant expenses a payment that should be capitalised.Which of the following is TRUE?

On 1 October 2016,Nurix Company purchased a patent for $200,000 cash.Although the patent gives legal protection for 20 years,the patent is expected to be used for only 10 years.What will be the balance in the patent account on 30 September 2017?

If the sales price of an item of property,plant and equipment is lower than the carrying amount,there will be a loss on sale.

A company's accountant capitalises a payment that should be recorded as an expense.Which of the following is TRUE?

Which of the following items should be depreciated?

A coal mine costs $1,008,000 and is estimated to hold 51,000 tonnes of coal.There is no residual value.10,000 tonnes are extracted and sold during the first year of operations.Calculate depletion per unit.

A revaluation increment will always be credited to revenue account.

On 1 January 2016,Portwell Company purchased a patent for $200 000.It estimates a useful life of four years.At the end of 2016,the Patent account will have a debit balance of $200 000 and there will be a credit balance in the Accumulated amortisation account of $50 000.

Expenditures that extend the life of an asset or increase its productive capacity should be expensed.

When an asset is fully depreciated,no further depreciation expense is recorded.

The most common asset to revalue downwards is land.

Which of the following assets is NOT an intangible asset?

A photocopy machine costs $99,000 when new and has accumulated depreciation of $92,000.Suppose the company junks this machine and receives nothing.What is the result of the disposal transaction?

When an item of property,plant and equipment is sold,if the carrying amount is higher than the sales price,there will be a loss on sale.

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

Normal expenditures for repairs and maintenance should be capitalised.

A loss occurs on the exchange of an item of property,plant and equipment if the market value of the new asset received is greater than the total amount given up in the exchange.

Which of the following is the amount capitalised as goodwill?

To determine if there is a gain or loss on the sale of an asset,you must compare:

Plant and equipment are more likely to decrease in value than increase.

Which of the following items is included in the journal entry if a company sells equipment at a price less than its carrying amount?

A company's accountant expenses a payment that should be capitalised.Which of the following is TRUE?

On 1 October 2016,Nurix Company purchased a patent for $200,000 cash.Although the patent gives legal protection for 20 years,the patent is expected to be used for only 10 years.What will be the balance in the patent account on 30 September 2017?

If the sales price of an item of property,plant and equipment is lower than the carrying amount,there will be a loss on sale.

A company's accountant capitalises a payment that should be recorded as an expense.Which of the following is TRUE?

Which of the following items should be depreciated?

A coal mine costs $1,008,000 and is estimated to hold 51,000 tonnes of coal.There is no residual value.10,000 tonnes are extracted and sold during the first year of operations.Calculate depletion per unit.

A revaluation increment will always be credited to revenue account.

On 1 January 2016,Portwell Company purchased a patent for $200 000.It estimates a useful life of four years.At the end of 2016,the Patent account will have a debit balance of $200 000 and there will be a credit balance in the Accumulated amortisation account of $50 000.

Expenditures that extend the life of an asset or increase its productive capacity should be expensed.

When an asset is fully depreciated,no further depreciation expense is recorded.

The most common asset to revalue downwards is land.

Which of the following assets is NOT an intangible asset?

A photocopy machine costs $99,000 when new and has accumulated depreciation of $92,000.Suppose the company junks this machine and receives nothing.What is the result of the disposal transaction?

When an item of property,plant and equipment is sold,if the carrying amount is higher than the sales price,there will be a loss on sale.

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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