Question 1

Another name for a tangible long-lived asset is a fixed asset.

Accepted Answer

A) True 
 B)False

Question 2

The MegaHit Film Studio has a licensing right (or agreement)to distribute films produced by the Artsy Film Company.How would the MegaHit Company classify this licensing right on its balance sheet?

Accepted Answer

A) Tangible asset 
B) Intellectual property asset 
C) Intangible asset 
D) Nonreported asset 
A) Tangible asset 
B) Intellectual property asset 
C) Intangible asset 
D) Nonreported asset

Question 3

A piece of equipment purchased on January 1,2017,for $16,000 was estimated to have a residual value of $4,000 at the end of its three-year useful life.If the equipment was depreciated using the straight-line method and disposed of on December 31,2018,for $5,000,what amount of gain or loss would be reported on the income statement?

Accepted Answer

Annual SL Amortization @#LAT-DLM& Cost @#LAT-DLM& Accumulate

Question 4

Shaggy Limited purchased a new van on January 1,2018.The van cost $20,000.It has an estimated life of five years and the estimated residual value is $5,000.Shaggy uses the double-declining-balance method to compute depreciation. What is the adjusted balance in the Accumulated depreciation account at the end of 2019?

Accepted Answer

A) $3,200 
B) $4,800 
C) $9,600. 
D) $12,800. 
A) $3,200 
B) $4,800 
C) $9,600. 
D) $12,800.

Question 5

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

Accepted Answer

A) the price for which it could be sold. 
B) its acquisition cost or current market value,whichever is lower. 
C) its purchase price minus accumulated depreciation. 
D) its purchase price adjusted for inflation. 
A) the price for which it could be sold. 
B) its acquisition cost or current market value,whichever is lower. 
C) its purchase price minus accumulated depreciation. 
D) its purchase price adjusted for inflation.

Question 6

The amount of net income will be higher in case of straight line depreciation as compared to double declining method.

Accepted Answer

A) True 
 B)False

Question 7

A company purchases property that includes land,buildings,and equipment for $5.5 million.The company pays $180,000 in legal fees,$220,000 in commissions,and $100,000 in appraisal fees.The land is estimated at 25%,the buildings are at 40%,and the equipment at 35% of the property value.Prepare the journal entry that is required to record the purchase assuming that the company paid 50% of the amounts using cash and signed a note for the remainder.Explain how you derived your answer.

Accepted Answer

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Question 8

In recording the acquisition cost of an entire business:

Accepted Answer

A) goodwill is recorded as the excess of cost over the fair market value of identifiable net assets. 
B) assets are recorded at the seller's book values. 
C) goodwill,if it exists,is never recorded. 
D) goodwill is recorded as the excess of cost over the book value of identifiable net assets. 
A) goodwill is recorded as the excess of cost over the fair market value of identifiable net assets. 
B) assets are recorded at the seller's book values. 
C) goodwill,if it exists,is never recorded. 
D) goodwill is recorded as the excess of cost over the book value of identifiable net assets.

Question 9

Company A uses an accelerated depreciation method while Company B uses the straight-line method.All other things equal,during the first few years of the asset's use,Company B will show which of the following compared to Company A?

Accepted Answer

A) A smaller fixed asset turnover ratio and a smaller gain on asset disposal. 
B) A larger fixed asset turnover ratio and a larger gain on asset disposal. 
C) A smaller fixed asset turnover ratio and a larger gain on asset disposal. 
D) A larger fixed asset turnover ratio and a smaller gain on asset disposal. 
A) A smaller fixed asset turnover ratio and a smaller gain on asset disposal. 
B) A larger fixed asset turnover ratio and a larger gain on asset disposal. 
C) A smaller fixed asset turnover ratio and a larger gain on asset disposal. 
D) A larger fixed asset turnover ratio and a smaller gain on asset disposal.

Question 10

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

Accepted Answer

A) a gain,increasing net income and shareholders' equity. 
B) revenue,increasing net income and shareholders' equity. 
C) cash,increasing assets and shareholders' equity. 
D) accumulated depreciation,increasing assets and shareholders' equity. 
A) a gain,increasing net income and shareholders' equity. 
B) revenue,increasing net income and shareholders' equity. 
C) cash,increasing assets and shareholders' equity. 
D) accumulated depreciation,increasing assets and shareholders' equity.

Question 11

The fixed asset turnover ratio measures the:

Accepted Answer

A) useful life of long-lived assets. 
B) the average difference between book value and disposal value of fixed assets. 
C) useful life of intangible assets. 
D) efficiency with which the investment in fixed assets produces revenue. 
A) useful life of long-lived assets. 
B) the average difference between book value and disposal value of fixed assets. 
C) useful life of intangible assets. 
D) efficiency with which the investment in fixed assets produces revenue.

Question 12

Match between columns
                        Premises: Net book value
Patent
EBITDA
Straight-line depreciation
Fixed assets
Residual value
Goodwill
Trademark
Accelerated depreciation

Accepted Answer

The Answer of What a company expects to receive when is...

Question 13

The only asset that is assumed to have an indefinite useful life is:

Accepted Answer

A) Property,Plant and Equipment. 
B) Contra assets. 
C) Land. 
D) None of the choices are correct. 
A) Property,Plant and Equipment. 
B) Contra assets. 
C) Land. 
D) None of the choices are correct.

Question 14

Straight-line depreciation results in,

Accepted Answer

A) Depreciation expense being a constant amount each year. 
B) Accumulated depreciation increasing by an equal amount each year. 
C) Book value decreasing by the same equal amount each year. 
D) All of the choices are correct. 
A) Depreciation expense being a constant amount each year. 
B) Accumulated depreciation increasing by an equal amount each year. 
C) Book value decreasing by the same equal amount each year. 
D) All of the choices are correct.

Question 15

If net sales revenue and the average book value of fixed assets $\bold{\text{both rise}}$ 5%:

Accepted Answer

A) the fixed asset turnover ratio will rise. 
B) the fixed asset turnover ratio will fall. 
C) the fixed asset turnover ratio will stay the same. 
D) the impact on the fixed asset turnover ratio cannot be determined since the beginning values are unknown. 
A) the fixed asset turnover ratio will rise. 
B) the fixed asset turnover ratio will fall. 
C) the fixed asset turnover ratio will stay the same. 
D) the impact on the fixed asset turnover ratio cannot be determined since the beginning values are unknown.

Question 16

At the beginning of 2019,your company buys a $30,000 piece of equipment that it expects to use for 4 years.The company expects to produce a total of 200,000 units.The equipment has an estimated residual value of $2,000.
a.Find the depreciable cost.
b.Find the depreciation expense per year under the straight-line method.
c.Prepare an depreciation schedule under the straight-line method.
d.Find the depreciation rate per unit under the units-of-production method.
e.Compare the annual depreciation expense using both methods assuming constant annual production.
f.Prepare an depreciation schedule under the units-of-production method if 44,000 units are produced in year one,53,000 units in year two,51,000 units in year three,and 52,000 units in year four.

Accepted Answer

a.Depreciable cost is acquisition cost m

Question 17

Match between columns
                        Premises: Declining-balance method
Long-lived assets
Net sales revenue
Asset impairment loss
Average net fixed assets
Carrying value
Capitalization of cost
Units-of-production method
Depreciation

Accepted Answer

The Answer of Also known as book value. and The is...

Question 18

How does an asset impairment loss impact a company's financial statements?

Accepted Answer

A) Raise expenses and lower both revenue and net income. 
B) Lower assets,shareholders' equity,and net income. 
C) Raise expenses and lower net income with no effect on any other items. 
D) Raise liabilities and lower shareholders' equity. 
A) Raise expenses and lower both revenue and net income. 
B) Lower assets,shareholders' equity,and net income. 
C) Raise expenses and lower net income with no effect on any other items. 
D) Raise liabilities and lower shareholders' equity.

Question 19

A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31,2018.The accumulated depreciation account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded.The company should recognize a:

Accepted Answer

A) $100,000 loss on disposal. 
B) $40,000 gain on disposal. 
C) $40,000 loss on disposal. 
D) $25,000 loss on disposal. 
A) $100,000 loss on disposal. 
B) $40,000 gain on disposal. 
C) $40,000 loss on disposal. 
D) $25,000 loss on disposal.

Question 20

The main difference between ordinary repairs and extraordinary repairs is:

Accepted Answer

A) ordinary repairs cost less. 
B) ordinary repairs are expenditures for routine maintenance and upkeep,whereas extraordinary repairs increase an asset economic usefulness in the future through increased efficiency,capacity,or longer life. 
C) extraordinary repairs only maintain the asset for a short time,whereas ordinary repairs increase the usefulness of assets beyond their original condition. 
D) extraordinary repairs are expenses,not expenditures. 
A) ordinary repairs cost less. 
B) ordinary repairs are expenditures for routine maintenance and upkeep,whereas extraordinary repairs increase an asset economic usefulness in the future through increased efficiency,capacity,or longer life. 
C) extraordinary repairs only maintain the asset for a short time,whereas ordinary repairs increase the usefulness of assets beyond their original condition. 
D) extraordinary repairs are expenses,not expenditures.

Another name for a tangible long-lived asset is a fixed asset.

The MegaHit Film Studio has a licensing right (or agreement)to distribute films produced by the Artsy Film Company.How would the MegaHit Company classify this licensing right on its balance sheet?

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

The amount of net income will be higher in case of straight line depreciation as compared to double declining method.

In recording the acquisition cost of an entire business:

Company A uses an accelerated depreciation method while Company B uses the straight-line method.All other things equal,during the first few years of the asset's use,Company B will show which of the following compared to Company A?

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

The fixed asset turnover ratio measures the:

The only asset that is assumed to have an indefinite useful life is:

Straight-line depreciation results in,

If net sales revenue and the average book value of fixed assets $\bold{\text{both rise}}$ 5%:

How does an asset impairment loss impact a company's financial statements?

A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31,2018.The accumulated depreciation account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded.The company should recognize a:

The main difference between ordinary repairs and extraordinary repairs is:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, financial Statements, and Financial Results

Fraud, internal Control, and Cash

Merchandising Operations and the Multi-Step Income Statement

Inventory and Cost of Goods Sold

Receivables, bad Debt Expense, and Interest Revenue

Liabilities

Shareholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 9: Long-Lived Tangible and Intangible Assets

Another name for a tangible long-lived asset is a fixed asset.

The MegaHit Film Studio has a licensing right (or agreement)to distribute films produced by the Artsy Film Company.How would the MegaHit Company classify this licensing right on its balance sheet?

The net amount shown on a balance sheet for an intangible asset with an unlimited life should be:

The amount of net income will be higher in case of straight line depreciation as compared to double declining method.

In recording the acquisition cost of an entire business:

Company A uses an accelerated depreciation method while Company B uses the straight-line method.All other things equal,during the first few years of the asset's use,Company B will show which of the following compared to Company A?

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

The fixed asset turnover ratio measures the:

The only asset that is assumed to have an indefinite useful life is:

Straight-line depreciation results in,

If net sales revenue and the average book value of fixed assets both rise\bold{\text{both rise}}both rise 5%:

How does an asset impairment loss impact a company's financial statements?

A company sells a long-lived asset that originally cost $200,000 for $50,000 on December 31,2018.The accumulated depreciation account had a balance of $110,000 after the current year's depreciation of $45,000 had been recorded.The company should recognize a:

The main difference between ordinary repairs and extraordinary repairs is:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments, financial Statements, and Financial Results

Fraud, internal Control, and Cash

Merchandising Operations and the Multi-Step Income Statement

Inventory and Cost of Goods Sold

Receivables, bad Debt Expense, and Interest Revenue

Liabilities

Shareholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

If net sales revenue and the average book value of fixed assets $\bold{\text{both rise}}$ 5%: