Question 1

Which of the following statements about derecognition of an asset is true?

Accepted Answer

A) Derecognition requires that the firm remove the asset acquisition value from the balance sheet but not the related accumulated depreciation. 
B) Derecognition increases or decreases the balance of the Allowance for Derecognition account. 
C) Before a gain or loss on derecognition is recognized,the firm must always first recognize current period depreciation expense. 
D) A loss on derecognition occurs when the amount of cash proceeds (if any)is less than the acquisition cost of the asset. 
A) Derecognition requires that the firm remove the asset acquisition value from the balance sheet but not the related accumulated depreciation. 
B) Derecognition increases or decreases the balance of the Allowance for Derecognition account. 
C) Before a gain or loss on derecognition is recognized,the firm must always first recognize current period depreciation expense. 
D) A loss on derecognition occurs when the amount of cash proceeds (if any)is less than the acquisition cost of the asset.

Question 2

A fixed asset with a five-year estimated useful life and no scrap value is sold at the end of the second year of its useful life.How would using the straight-line method of depreciation instead of the double-declining balance method of depreciation affect a gain or loss on the sale of the plant asset?

Accepted Answer

A) A gain would be greater or a loss would be less using straight-line depreciation. 
B) A gain would be less or a loss would be greater using straight-line depreciation. 
C) A gain would be less or a loss would be less using straight-line depreciation. 
D) Neither the gain or loss would be different using straight-line depreciation instead of double-declining-balance method. 
A) A gain would be greater or a loss would be less using straight-line depreciation. 
B) A gain would be less or a loss would be greater using straight-line depreciation. 
C) A gain would be less or a loss would be less using straight-line depreciation. 
D) Neither the gain or loss would be different using straight-line depreciation instead of double-declining-balance method.

Question 3

Which of the following is not a characteristic of intangible assets?

Accepted Answer

A) economic value 
B) long-term benefits 
C) monetary in nature 
D) lack physical existence 
A) economic value 
B) long-term benefits 
C) monetary in nature 
D) lack physical existence

Question 4

Over what period of time should goodwill be amortized?

Accepted Answer

A) 40 years 
B) its useful economic life 
C) 40 years or its useful economic life,whichever is shorter 
D) Goodwill is never amortized. 
A) 40 years 
B) its useful economic life 
C) 40 years or its useful economic life,whichever is shorter 
D) Goodwill is never amortized.

Question 5

On February 1,2017,Ursa Corporation purchased a parcel of land as a factory site for $100,000.It demolished an old building on the property and began construction on a new building that was completed on October 2,2017.Costs incurred during this period are:
   In addition,Ursa sold salvaged materials resulting from the demolition for $2,000.
Required:
a.At what amount should Ursa record the cost of the land and the new building,respectively?
b.If management misclassified a portion of the building's cost as part of the cost of the land,what
would be the effect on the financial statements?

Accepted Answer

a.
 Land: @#IMG-DLM& 
 Building: @#IMG-DLM& 
 b.
 If a porti

Question 6

U.S.GAAP requires straight-line amortization of finite-life intangible assets over the useful life or legal life,whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 7

U.S.GAAP requires companies to reconcile the historical cost and accumulated depreciation at the beginning of the period with amounts at the end of the period.

Accepted Answer

A) True 
 B)False

Question 8

Alzparker Company constructed a building at a total actual cost of $24,000,000.Average accumulated expenditures during the construction period amounted to $17,000,000.As a result of financing arrangements,actual interest was $2,120,000,and avoidable interest was $1,600,000.What is the capitalizable cost of the equipment?

Accepted Answer

A) $19,120,000 
B) $25,600,000 
C) $26,120,000 
D) $27,720,000 
A) $19,120,000 
B) $25,600,000 
C) $26,120,000 
D) $27,720,000

Question 9

Which of the following is the legal life of a patent?

Accepted Answer

A) 17 years 
B) 20 years 
C) life of the inventor plus 20 years 
D) life of the inventor plus 70 years 
A) 17 years 
B) 20 years 
C) life of the inventor plus 20 years 
D) life of the inventor plus 70 years

Question 10

The period of time for which interest is to be capitalized ends when ________.

Accepted Answer

A) no additional interest cost is actually being incurred on direct financing for the acquisition of the asset 
B) a constructed is substantially complete and put into use 
C) a constructed asset is substantially complete and ready for its intended use 
D) an acquired asset is received and ready for its intended use 
A) no additional interest cost is actually being incurred on direct financing for the acquisition of the asset 
B) a constructed is substantially complete and put into use 
C) a constructed asset is substantially complete and ready for its intended use 
D) an acquired asset is received and ready for its intended use

Question 11

Indefinite-life assets include goodwill and renewable permits.

Accepted Answer

A) True 
 B)False

Question 12

Companies are required to disclose the amount of accumulated depreciation either for each major class of fixed assets or in total for all fixed assets.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following situations always results in a loss on derecognition of an asset?

Accepted Answer

A) The asset is abandoned. 
B) The cash proceeds from the sale are less than the book value of the asset. 
C) The carrying value of the asset is less than its book value at the time of derecognition. 
D) The cash proceeds from the sale (if any)are less than the acquisition cost of the asset. 
A) The asset is abandoned. 
B) The cash proceeds from the sale are less than the book value of the asset. 
C) The carrying value of the asset is less than its book value at the time of derecognition. 
D) The cash proceeds from the sale (if any)are less than the acquisition cost of the asset.

Question 14

Bakiponi Corp.provides the following data from its recent financial statements:   What is the average average remaining life of the company's fixed assets as of the end of 2017?

Accepted Answer

A) 3)2 
B) 3)4 
C) 4)4 
D) 5)8 
A) 3)2 
B) 3)4 
C) 4)4 
D) 5)8

Question 15

Which of the following intangible assets is not subject to amortization?

Accepted Answer

A) franchise 
B) goodwill 
C) copyright 
D) customer list 
A) franchise 
B) goodwill 
C) copyright 
D) customer list

Question 16

The depreciable base of an asset for all depreciation methods is the original cost of the asset minus planned scrap value.

Accepted Answer

A) True 
 B)False

Question 17

How does a firm determine the appropriate period of time over which an intangible asset should be amortized?

Accepted Answer

If the asset is an indefinite-life asset

Question 18

Which of the following is a way that IFRS disclosure requirements of property,plant,and equipment differ from U.S.GAAP disclosure requirements?

Accepted Answer

A) Companies disclose the accumulated depreciation at the end of the fiscal year by major class or in total. 
B) Companies provide a general description of the method(s)used in computing depreciation with respect to major classes of depreciable assets. 
C) Companies provide a reconciliation of the carrying values at the beginning of the year to the end of the year. 
D) Companies report the carrying value of property,plant,and equipment in total or by major class of long-term assets on the balance sheet. 
A) Companies disclose the accumulated depreciation at the end of the fiscal year by major class or in total. 
B) Companies provide a general description of the method(s)used in computing depreciation with respect to major classes of depreciable assets. 
C) Companies provide a reconciliation of the carrying values at the beginning of the year to the end of the year. 
D) Companies report the carrying value of property,plant,and equipment in total or by major class of long-term assets on the balance sheet.

Question 19

When land is purchased and an old building thereon is demolished,the total purchase price plus the demolition cost is the total capitalized value of the land.

Accepted Answer

A) True 
 B)False

Question 20

The cost of internally developed intangible assets is charged as an expense of the period in which the costs are incurred.

Accepted Answer

A) True 
 B)False

Which of the following statements about derecognition of an asset is true?

Which of the following is not a characteristic of intangible assets?

Over what period of time should goodwill be amortized?

U.S.GAAP requires straight-line amortization of finite-life intangible assets over the useful life or legal life,whichever is shorter.

U.S.GAAP requires companies to reconcile the historical cost and accumulated depreciation at the beginning of the period with amounts at the end of the period.

Which of the following is the legal life of a patent?

The period of time for which interest is to be capitalized ends when ________.

Indefinite-life assets include goodwill and renewable permits.

Companies are required to disclose the amount of accumulated depreciation either for each major class of fixed assets or in total for all fixed assets.

Which of the following situations always results in a loss on derecognition of an asset?

Bakiponi Corp.provides the following data from its recent financial statements: What is the average average remaining life of the company's fixed assets as of the end of 2017?

Which of the following intangible assets is not subject to amortization?

The depreciable base of an asset for all depreciation methods is the original cost of the asset minus planned scrap value.

How does a firm determine the appropriate period of time over which an intangible asset should be amortized?

Which of the following is a way that IFRS disclosure requirements of property,plant,and equipment differ from U.S.GAAP disclosure requirements?

When land is purchased and an old building thereon is demolished,the total purchase price plus the demolition cost is the total capitalized value of the land.

The cost of internally developed intangible assets is charged as an expense of the period in which the costs are incurred.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters

Exam 12: Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Which of the following statements about derecognition of an asset is true?

Which of the following is not a characteristic of intangible assets?

Over what period of time should goodwill be amortized?

U.S.GAAP requires straight-line amortization of finite-life intangible assets over the useful life or legal life,whichever is shorter.

U.S.GAAP requires companies to reconcile the historical cost and accumulated depreciation at the beginning of the period with amounts at the end of the period.

Which of the following is the legal life of a patent?

The period of time for which interest is to be capitalized ends when ________.

Indefinite-life assets include goodwill and renewable permits.

Companies are required to disclose the amount of accumulated depreciation either for each major class of fixed assets or in total for all fixed assets.

Which of the following situations always results in a loss on derecognition of an asset?

Bakiponi Corp.provides the following data from its recent financial statements: What is the average average remaining life of the company's fixed assets as of the end of 2017?

Which of the following intangible assets is not subject to amortization?

The depreciable base of an asset for all depreciation methods is the original cost of the asset minus planned scrap value.

How does a firm determine the appropriate period of time over which an intangible asset should be amortized?

Which of the following is a way that IFRS disclosure requirements of property,plant,and equipment differ from U.S.GAAP disclosure requirements?

When land is purchased and an old building thereon is demolished,the total purchase price plus the demolition cost is the total capitalized value of the land.

The cost of internally developed intangible assets is charged as an expense of the period in which the costs are incurred.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

Filters