Question 1

The proper journal entry to purchase a computer costing $975 on account to be utilized within the business would be

Accepted Answer

A) 
$\begin{array} { l } 
\text { Office Supplies }&975 \
\quad \text { Accounts Payable }&975
\end{array}$ 
B) 
Office Equipment $\quad$$\quad$975
Accounts Payable$\quad$$\quad$975 
C) 
Office Supplies $\quad$$\quad$975
Accounts Receivable$\quad$$\quad$975 
D)  
Office Equipment$\quad$$\quad$975
Accounts Receivable$\quad$$\quad$975 
A) 
$\begin{array} { l } 
\text { Office Supplies }&975 \
\quad \text { Accounts Payable }&975
\end{array}$ 
B) 
Office Equipment $\quad$$\quad$975
Accounts Payable$\quad$$\quad$975 
C) 
Office Supplies $\quad$$\quad$975
Accounts Receivable$\quad$$\quad$975 
D)  
Office Equipment$\quad$$\quad$975
Accounts Receivable$\quad$$\quad$975

Question 2

A characteristic of a fixed asset is that it is

Accepted Answer

A)  intangible 
B)  used in the operations of a business 
C)  held for sale in the ordinary course of the business 
D)  a short-term investment 
A)  intangible 
B)  used in the operations of a business 
C)  held for sale in the ordinary course of the business 
D)  a short-term investment

Question 3

An intangible asset is one that has a physical existence.

Accepted Answer

A) True 
 B)False

Question 4

Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The residual value of these assets is estimated at $10,000 at the end of their 4-year service life. Golden Sales managers want to evaluate the options of depreciation.
​
(a) Compute the annual straight-line depreciation and provide the sample depreciation journal entry to be posted
at the end of each of the years.
(b) Write the journal entries for each year of the service life for these assets using the double-declining balance
method.

Accepted Answer

(a) @#IMG-DLM&_TB2281_00 ​ @#IMG-DLM&_TB2281_00 ​

Question 5

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

Accepted Answer

A)  straight-line 
B)  units-of-output 
C)  double-declining-balance 
D)  sum-of-the-digits 
A)  straight-line 
B)  units-of-output 
C)  double-declining-balance 
D)  sum-of-the-digits

Question 6

Losses on the discarding of fixed assets are reported in the income statement.

Accepted Answer

A) True 
 B)False

Question 7

On December 31, Strike Company sold one of its batting cages for $55,000. The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. What is the amount of the gain or loss on this transaction?

Accepted Answer

A)  loss of $55,000 
B)  loss of $5,000 
C)  gain of $5,000 
D)  gain of $55,000 
A)  loss of $55,000 
B)  loss of $5,000 
C)  gain of $5,000 
D)  gain of $55,000

Question 8

Residual value is also known as all of the following except

Accepted Answer

A)  scrap value 
B)  trade-in value 
C)  salvage value 
D)  net book value 
A)  scrap value 
B)  trade-in value 
C)  salvage value 
D)  net book value

Question 9

Amortization Expense

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

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has 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 $50,000 
B)  loss of $50,000 
C)  no gain or loss 
D)  cannot be determined 
A)  gain of $50,000 
B)  loss of $50,000 
C)  no gain or loss 
D)  cannot be determined

Question 11

When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.

Accepted Answer

A) True 
 B)False

Question 12

A capital expenditure results in a debit to

Accepted Answer

A)  an expense account 
B)  a capital account 
C)  a liability account 
D)  an asset account 
A)  an expense account 
B)  a capital account 
C)  a liability account 
D)  an asset account

Question 13

A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

Accepted Answer

$54,000 ÷

Question 14

The double-declining-balance method is an accelerated depreciation method.

Accepted Answer

A) True 
 B)False

Question 15

Match between columns
                        Premises:  Fees paid to architect to design new office building
 Cost of insurance during the construction of new office building
 Interest on money borrowed to finance construction of new office building
 Sales taxes paid on new factory equipment
 Freight costs paid on purchase of new equipment
 Repairs made to used office equipment
 Costs to survey a new piece of land for a new business location
 Costs of government permits required to develop land for a new business location
 Purchase price of land purchased for new business site
 Landscaping at new business location

Accepted Answer

The Answer of Buildings and Machinery and equipment and Land is...

Question 16

Expenditures that increase operating efficiency or capacity for the remaining useful life of a fixed asset are called capital expenditures.

Accepted Answer

A) True 
 B)False

Question 17

On June 1, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours, which ends on December 31.  
Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service.

Accepted Answer

A)  $17,500 
B)  $30,000 
C)  $12,500 
D)  $40,000 
A)  $17,500 
B)  $30,000 
C)  $12,500 
D)  $40,000

Question 18

A copy machine acquired on July 1 with a cost of $1,450 has an estimated useful life of 4 years. Assuming that it will have a residual value of $250, determine the depreciation for the first year by the double-declining-balance method.

Accepted Answer

First-year depreciat

Question 19

What is the cost of the land, based upon the following data?
$\begin{array}{lr}
\text { Land purchase price } & \$ 178,000 \
\text { Broker's commission } & 15,000 \
\text { Payment for the demolition } & \
\text { and removal of existing building } & 5,000\
\text { Cash received from the sale of materials }\
\text { salvaged from the demolished building }&2,000
\end{array}$

Accepted Answer

Cost of land = Land purchase price + Bro

Question 20

A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

Accepted Answer

A)  $9,500 
B)  $9,000 
C)  $10,800 
D)  $11,400 
A)  $9,500 
B)  $9,000 
C)  $10,800 
D)  $11,400

The proper journal entry to purchase a computer costing $975 on account to be utilized within the business would be

A characteristic of a fixed asset is that it is

An intangible asset is one that has a physical existence.

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

Losses on the discarding of fixed assets are reported in the income statement.

On December 31, Strike Company sold one of its batting cages for $55,000. The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. What is the amount of the gain or loss on this transaction?

Residual value is also known as all of the following except

Amortization Expense

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has 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?

When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.

A capital expenditure results in a debit to

A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

The double-declining-balance method is an accelerated depreciation method.

Expenditures that increase operating efficiency or capacity for the remaining useful life of a fixed asset are called capital expenditures.

On June 1, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours, which ends on December 31. Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service.

A copy machine acquired on July 1 with a cost of $1,450 has an estimated useful life of 4 years. Assuming that it will have a residual value of $250, determine the depreciation for the first year by the double-declining-balance method.

What is the cost of the land, based upon the following data? Land purchase price \ 178,000 Broker's commission 15,000 Payment for the demolition and removal of existing building 5,000 Cash received from the sale of materials salvaged from the demolished building 2,000

A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

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

The proper journal entry to purchase a computer costing $975 on account to be utilized within the business would be

A characteristic of a fixed asset is that it is

An intangible asset is one that has a physical existence.

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

Losses on the discarding of fixed assets are reported in the income statement.

On December 31, Strike Company sold one of its batting cages for $55,000. The equipment had an initial cost of $310,000 and has accumulated depreciation of $260,000. Depreciation has been taken up to the end of the year. What is the amount of the gain or loss on this transaction?

Residual value is also known as all of the following except

Amortization Expense

On December 31, Strike Company sold one of its batting cages for $50,000. The equipment had an original cost of $310,000 and has 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?

When land is purchased to construct a new building, the cost of removing any structures on the land should be charged to the building account.

A capital expenditure results in a debit to

A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

The double-declining-balance method is an accelerated depreciation method.

Expenditures that increase operating efficiency or capacity for the remaining useful life of a fixed asset are called capital expenditures.

On June 1, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours, which ends on December 31. Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service.

A copy machine acquired on July 1 with a cost of $1,450 has an estimated useful life of 4 years. Assuming that it will have a residual value of $250, determine the depreciation for the first year by the double-declining-balance method.

What is the cost of the land, based upon the following data? Land purchase price \ 178,000 Broker's commission 15,000 Payment for the demolition and removal of existing building 5,000 Cash received from the sale of materials salvaged from the demolished building 2,000

A machine costing $57,000 with a 6-year life and $54,000 depreciable cost was purchased January 1. Compute the yearly depreciation expense using straight-line depreciation.

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