Question 1

Which of the following below is an example of a capital expenditure?

Accepted Answer

A)  cleaning the carpet in the front room 
B)  tune-up for a company truck 
C)  replacing an engine in a company car 
D)  replacing all burned-out light bulbs in the factory 
A)  cleaning the carpet in the front room 
B)  tune-up for a company truck 
C)  replacing an engine in a company car 
D)  replacing all burned-out light bulbs in the factory

Question 2

Which of the following is included in the cost of constructing a building?

Accepted Answer

A)  insurance costs during construction 
B)  cost of paving the parking lot 
C)  cost of repairing vandalism damage during construction 
D)  cost of removing the demolished building existing on the land when it was purchased 
A)  insurance costs during construction 
B)  cost of paving the parking lot 
C)  cost of repairing vandalism damage during construction 
D)  cost of removing the demolished building existing on the land when it was purchased

Question 3

Match between columns
                        Premises: Replaced a broken window.
Serviced all the air conditioners before summer started.
Added a warehouse to the back of the building.
Installed window shutters on all windows.
Replaced the roof that had been on the building 23 years.
Repainted the interior walls.
Replaced the air conditioners in the customer service areas.

Accepted Answer

The Answer of Revenue expenditure and Capital expenditure is...

Question 4

A building with an appraisal value of $154,000 is made available at an offer price of $172,000. The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,000. What is the cost basis recorded in the buyer's accounting records to recognize this purchase?

Accepted Answer

The cost basis recorded in the

Question 5

Assume the following facts related to a land purchase:

Accepted Answer

A)  $178,000 
B)  $180,000 
C)  $193,000 
D)  $196,000 
A)  $178,000 
B)  $180,000 
C)  $193,000 
D)  $196,000

Question 6

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Accepted Answer

A)  amortization 
B)  depletion 
C)  depreciation 
D)  allocation 
A)  amortization 
B)  depletion 
C)  depreciation 
D)  allocation

Question 7

A lathe priced at a fair market value of $124,000 is acquired in a transaction that has commercial substance by trading in a similar lathe and paying cash for the difference between the trade-in allowance of $45,000 and the price of the new lathe.
​
(a) What is the amount of cash given?
(b) Assuming that the book value of the lathe traded in is $36,000, what is the gain or loss on the exchange?

Accepted Answer

(a) Cash given = Cost of new lathe - tra

Question 8

Sands Company purchased mining rights for $500,000. They expect to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include

Accepted Answer

A)  a debit to Depletion Expense for $175,000 
B)  a credit to Depletion Expense for $350,000 
C)  a debit to Accumulated Depletion for $175,000 
D)  a credit to Accumulated Depletion for $350,000 
A)  a debit to Depletion Expense for $175,000 
B)  a credit to Depletion Expense for $350,000 
C)  a debit to Accumulated Depletion for $175,000 
D)  a credit to Accumulated Depletion for $350,000

Question 9

Research and Development Costs

Accepted Answer

A) Current Assets 
B) Fixed Assets 
C) Intangible Assets 
D) Current Liability 
E) Long-Term Liability
F)Owners' Equity
G)Revenues
H)Operating Expenses
I)Other Income/Expense 
A) Current Assets 
B) Fixed Assets 
C) Intangible Assets 
D) Current Liability 
E) Long-Term Liability
F)Owners' Equity
G)Revenues
H)Operating Expenses
I)Other Income/Expense

Question 10

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

Accepted Answer

A) True 
 B)False

Question 11

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

Accepted Answer

A) True 
 B)False

Question 12

On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

Accepted Answer

A)  gain of $20,000 
B)  gain of $30,000 
C)  loss of $20,000 
D)  loss of $30,000 
A)  gain of $20,000 
B)  gain of $30,000 
C)  loss of $20,000 
D)  loss of $30,000

Question 13

The calculation for annual depreciation using the straight-line depreciation method is

Accepted Answer

A)  Initial cost / Estimated useful life 
B)  Depreciable cost / Estimated useful life 
C)  Depreciable cost × Estimated useful life 
D)  Initial cost × Estimated useful life 
A)  Initial cost / Estimated useful life 
B)  Depreciable cost / Estimated useful life 
C)  Depreciable cost × Estimated useful life 
D)  Initial cost × Estimated useful life

Question 14

Classify each of the following costs associated with long-lived assets as one of the following:
-Supplies (materials) used to test new equipment

Accepted Answer

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

Question 15

Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of 5 years, or 14,000 operating hours, and a residual value of $10,000. Assume 1,200 hours were used the first year and 2,250, the second year. What is the first-year depreciation for straight-line (SL), double-declining balance (DDB) and units-of-output (UOO) methods?

Accepted Answer

A)  SL: $72,000; DDB: $144,000; UOO: $30,000 
B)  SL: $70,000; DDB: $140,000; UOO: $30,000 
C)  SL: $70,000, DDB: $144,000; UOO: $30,000 
D)  SL: $72,000; DDB: $140,000; UOO: $56,250 
A)  SL: $72,000; DDB: $144,000; UOO: $30,000 
B)  SL: $70,000; DDB: $140,000; UOO: $30,000 
C)  SL: $70,000, DDB: $144,000; UOO: $30,000 
D)  SL: $72,000; DDB: $140,000; UOO: $56,250

Question 16

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-output method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

Accepted Answer

A)  $5,000 
B)  $35,000 
C)  $21,000 
D)  $45,000 
A)  $5,000 
B)  $35,000 
C)  $21,000 
D)  $45,000

Question 17

If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is

Accepted Answer

A) 
$\begin{array} { l l l } 
\text { Depreciation Expense } & 100 \
\text { Accumulated Depreciation } & & 100
\end{array}$ 
B) 
$\begin{array} { l l l } 
\text { Depreciation Expense }& 1,200 \
\text { Accumulated Depreciation }& 1,200
\end{array}$ 
C)  
Accumulated Depreciation $\quad 1,200$
Depreciation Expense $\quad 1,200$ 
D)  
$\begin{array}{lll}
\text { Accumulated Depreciation }& 100 \
\text { Depreciation Expense }& 100
\end{array}$ 
A) 
$\begin{array} { l l l } 
\text { Depreciation Expense } & 100 \
\text { Accumulated Depreciation } & & 100
\end{array}$ 
B) 
$\begin{array} { l l l } 
\text { Depreciation Expense }& 1,200 \
\text { Accumulated Depreciation }& 1,200
\end{array}$ 
C)  
Accumulated Depreciation $\quad 1,200$
Depreciation Expense $\quad 1,200$ 
D)  
$\begin{array}{lll}
\text { Accumulated Depreciation }& 100 \
\text { Depreciation Expense }& 100
\end{array}$

Question 18

Classify each of the following costs associated with long-lived assets as one of the following:
-Costs to survey a new piece of land for a new business location

Accepted Answer

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

Question 19

A fixed asset's estimated value at the time it is to be retired from service is called

Accepted Answer

A)  book value 
B)  residual value 
C)  market value 
D)  carrying value 
A)  book value 
B)  residual value 
C)  market value 
D)  carrying value

Question 20

All property, plant, and equipment assets are depreciated over time.

Accepted Answer

A) True 
 B)False

Which of the following below is an example of a capital expenditure?

Which of the following is included in the cost of constructing a building?

Assume the following facts related to a land purchase:

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Sands Company purchased mining rights for $500,000. They expect to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include

Research and Development Costs

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

The calculation for annual depreciation using the straight-line depreciation method is

Classify each of the following costs associated with long-lived assets as one of the following: -Supplies (materials) used to test new equipment

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-output method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is

Classify each of the following costs associated with long-lived assets as one of the following: -Costs to survey a new piece of land for a new business location

A fixed asset's estimated value at the time it is to be retired from service is called

All property, plant, and equipment assets are depreciated over time.

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Exam 9: Long-Term Assets: Fixed and Intangible

Which of the following below is an example of a capital expenditure?

Which of the following is included in the cost of constructing a building?

Assume the following facts related to a land purchase:

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

Sands Company purchased mining rights for $500,000. They expect to harvest 1 million tons of ore over the next five years. During the current year, Sands mined 350,000 tons of ore. The entry to record the depletion would include

Research and Development Costs

The cost of repairing damage to a machine during installation is debited to a fixed asset account.

An exchange is said to have commercial substance if future cash flows remain the same as a result of the exchange.

On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had accumulated depreciation of $260,000. Depreciation has been recorded up to the end of the year. What is the amount of the gain or loss on this transaction?

The calculation for annual depreciation using the straight-line depreciation method is

Classify each of the following costs associated with long-lived assets as one of the following: -Supplies (materials) used to test new equipment

A machine with a cost of $120,000 has an estimated residual value of $15,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-output method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours?

If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is

Classify each of the following costs associated with long-lived assets as one of the following: -Costs to survey a new piece of land for a new business location

A fixed asset's estimated value at the time it is to be retired from service is called

All property, plant, and equipment assets are depreciated over time.

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters