Question 1

How is the depreciation expense calculated using the service quantity method?

Accepted Answer

A)  Depreciation expense = Depreciable amount/Total quantity of productive service 
B)  Depreciation expense = (Depreciable amount/Total quantity of productive service)× Productive service for period 
C)  Depreciation expense = Depreciable amount/Productive service for period 
D)  Depreciation expense = Depreciable amount × Productive service for period 
A)  Depreciation expense = Depreciable amount/Total quantity of productive service 
B)  Depreciation expense = (Depreciable amount/Total quantity of productive service)× Productive service for period 
C)  Depreciation expense = Depreciable amount/Productive service for period 
D)  Depreciation expense = Depreciable amount × Productive service for period B

Question 2

What is another name for tangible assets?

Accepted Answer

A)  Plant assets 
B)  Operational assets 
C)  Property,plant and equipment 
D)  All of these 
A)  Plant assets 
B)  Operational assets 
C)  Property,plant and equipment 
D)  All of these D

Question 3

How is the useful life of a tangible asset defined?

Accepted Answer

A)  The period of time over which an asset is expected to be used by the entity. 
B)  The number of production output or similar units expected to be obtained from the asset by the entity. 
C)  a or b 
D)  Neither a nor b 
A)  The period of time over which an asset is expected to be used by the entity. 
B)  The number of production output or similar units expected to be obtained from the asset by the entity. 
C)  a or b 
D)  Neither a nor b C

Question 4

A multiple is needed to use the declining balance method of depreciation.How is the multiple chosen?

Accepted Answer

A)  All around the world,the choice is completely open. 
B)  In every country,the tax authorities have defined,for each class of assets,a standardized multiple. 
C)  The multiple is always equal to two. 
D)  The selection of the multiple varies greatly from country to country. 
A)  All around the world,the choice is completely open. 
B)  In every country,the tax authorities have defined,for each class of assets,a standardized multiple. 
C)  The multiple is always equal to two. 
D)  The selection of the multiple varies greatly from country to country.

Question 5

What is the distinguishing feature of a tangible asset compared to other fixed assets?

Accepted Answer

A)  A tangible asset has a physical substance. 
B)  A tangible asset is subject to a reduction of its value over time. 
C)  A tangible asset is a long-lived asset. 
D)  A tangible asset is used in the course of the operations of the business and is not acquired for the purpose of resale. 
A)  A tangible asset has a physical substance. 
B)  A tangible asset is subject to a reduction of its value over time. 
C)  A tangible asset is a long-lived asset. 
D)  A tangible asset is used in the course of the operations of the business and is not acquired for the purpose of resale.

Question 6

Under certain circumstances,the interest costs must be included in the cost of construction.What is this known as?

Accepted Answer

A)  Inclusion of interest costs 
B)  Capitalization of interest costs 
C)  Recognition of interest costs 
D)  Computation of interest costs 
A)  Inclusion of interest costs 
B)  Capitalization of interest costs 
C)  Recognition of interest costs 
D)  Computation of interest costs

Question 7

If an airplane jet engine which is kept in inventory to be used during maintenance operations or for a replacement,is treated as a tangible asset,which of the following statements is true?

Accepted Answer

A)  It is never subject to depreciation. 
B)  It is subject to an annual depreciation expense even before being brought into operational use. 
C)  It is subject to an annual depreciation expense only when it is brought into operational use. 
D)  None of these 
A)  It is never subject to depreciation. 
B)  It is subject to an annual depreciation expense even before being brought into operational use. 
C)  It is subject to an annual depreciation expense only when it is brought into operational use. 
D)  None of these

Question 8

How can the main depreciation methods be classified?

Accepted Answer

A)  Time-based and cost-based methods 
B)  Time-based and activity level-based methods 
C)  Production-based and activity level-based methods 
D)  None of these 
A)  Time-based and cost-based methods 
B)  Time-based and activity level-based methods 
C)  Production-based and activity level-based methods 
D)  None of these

Question 9

Which of the following equations is correct?

Accepted Answer

A)  Gross value at the beginning of the period + Acquisitions of the period - Disposals of the period = Gross value at the end of the period 
B)  Gross value at the beginning of the period - Acquisitions of the period - Disposals of the period = Gross value at the end of the period 
C)  Gross value at the beginning of the period + Acquisitions of the period + Disposals of the period = Gross value at the end of the period 
D)  Gross value at the beginning of the period - Acquisitions of the period + Disposals of the period = Gross value at the end of the period 
A)  Gross value at the beginning of the period + Acquisitions of the period - Disposals of the period = Gross value at the end of the period 
B)  Gross value at the beginning of the period - Acquisitions of the period - Disposals of the period = Gross value at the end of the period 
C)  Gross value at the beginning of the period + Acquisitions of the period + Disposals of the period = Gross value at the end of the period 
D)  Gross value at the beginning of the period - Acquisitions of the period + Disposals of the period = Gross value at the end of the period

Question 10

What is the most commonly accepted useful life for furniture?

Accepted Answer

A)  3 years 
B)  5 years 
C)  10 years 
D)  20 years 
A)  3 years 
B)  5 years 
C)  10 years 
D)  20 years

Question 11

Fixed assets can be divided into which three categories?

Accepted Answer

A)  Buildings,equipment and goodwill 
B)  Ordinary,financial and extraordinary 
C)  Tangible,intangible and financial 
D)  None of these 
A)  Buildings,equipment and goodwill 
B)  Ordinary,financial and extraordinary 
C)  Tangible,intangible and financial 
D)  None of these

Question 12

What is the term used for the specific depreciation of lands purchased as natural resources for a productive activity?

Accepted Answer

A)  Depreciation 
B)  Depletion 
C)  Amortization 
D)  Impairment 
A)  Depreciation 
B)  Depletion 
C)  Amortization 
D)  Impairment

Question 13

What is the unsystematic cost allocation called?

Accepted Answer

A)  Depreciation 
B)  Amortization 
C)  Depletion 
D)  Impairment 
A)  Depreciation 
B)  Amortization 
C)  Depletion 
D)  Impairment

Question 14

Which criterion (criteria)should capital expenditures meet?

Accepted Answer

A)  The quantity of services from the asset will be increased through a longer useful life. 
B)  The quantity of services from the asset will be increased with more units of output. 
C)  The quality of the service received from using the asset will be increased. 
D)  Capital expenditures should meet at least one of the previous criteria. 
A)  The quantity of services from the asset will be increased through a longer useful life. 
B)  The quantity of services from the asset will be increased with more units of output. 
C)  The quality of the service received from using the asset will be increased. 
D)  Capital expenditures should meet at least one of the previous criteria.

Question 15

At the time of capitalization of the costs incurred in the construction of the asset,expenses pertaining to the new asset must go through the income statement.

Accepted Answer

A) True 
 B)False

Question 16

How is the depreciation expense calculated using the productive output method?

Accepted Answer

A)  Depreciation expense = (Depreciable amount/Life expressed in units of output)× Units of output for period 
B)  Depreciation expense = Depreciable amount/Units of output for period 
C)  Depreciation expense = Depreciable amount × Units of output for period 
D)  Depreciation expense = Depreciable amount/Life expressed in units of output 
A)  Depreciation expense = (Depreciable amount/Life expressed in units of output)× Units of output for period 
B)  Depreciation expense = Depreciable amount/Units of output for period 
C)  Depreciation expense = Depreciable amount × Units of output for period 
D)  Depreciation expense = Depreciable amount/Life expressed in units of output

Question 17

IAS 16 defines an 'impairment loss' as 'the amount by which the carrying amount of an asset exceeds its recoverable amount.'

Accepted Answer

A) True 
 B)False

Question 18

Under what circumstances are costs incurred after the acquisition of an asset (such as additions,improvements,or replacements),added to the asset's depreciable amount?

Accepted Answer

A)  They provide future service potential. 
B)  They extend the useful life of the asset. 
C)  They increase either the quantity or quality of service rendered by the asset. 
D)  All of these 
A)  They provide future service potential. 
B)  They extend the useful life of the asset. 
C)  They increase either the quantity or quality of service rendered by the asset. 
D)  All of these

Question 19

Acquisition cost is the amount of cash or cash equivalents paid,or the fair value of the other consideration given,to acquire an asset at the time of its acquisition.

Accepted Answer

A) True 
 B)False

Question 20

What is the objective of any accelerated depreciation method?

Accepted Answer

A)  To recognize greater amounts of depreciation in the later years of an asset's life and smaller amounts in the early years 
B)  To recognize greater amounts of depreciation in the early years of an asset's life and smaller amounts in the later years 
C)  To recognize stable amounts of depreciation in both the early and in the later years of an asset's life 
D)  To accelerate the computation of the depreciation expense by the accountants. 
A)  To recognize greater amounts of depreciation in the later years of an asset's life and smaller amounts in the early years 
B)  To recognize greater amounts of depreciation in the early years of an asset's life and smaller amounts in the later years 
C)  To recognize stable amounts of depreciation in both the early and in the later years of an asset's life 
D)  To accelerate the computation of the depreciation expense by the accountants.

How is the depreciation expense calculated using the service quantity method?

What is another name for tangible assets?

How is the useful life of a tangible asset defined?

A multiple is needed to use the declining balance method of depreciation.How is the multiple chosen?

What is the distinguishing feature of a tangible asset compared to other fixed assets?

Under certain circumstances,the interest costs must be included in the cost of construction.What is this known as?

If an airplane jet engine which is kept in inventory to be used during maintenance operations or for a replacement,is treated as a tangible asset,which of the following statements is true?

How can the main depreciation methods be classified?

Which of the following equations is correct?

What is the most commonly accepted useful life for furniture?

Fixed assets can be divided into which three categories?

What is the term used for the specific depreciation of lands purchased as natural resources for a productive activity?

What is the unsystematic cost allocation called?

Which criterion (criteria)should capital expenditures meet?

At the time of capitalization of the costs incurred in the construction of the asset,expenses pertaining to the new asset must go through the income statement.

How is the depreciation expense calculated using the productive output method?

IAS 16 defines an 'impairment loss' as 'the amount by which the carrying amount of an asset exceeds its recoverable amount.'

Under what circumstances are costs incurred after the acquisition of an asset (such as additions,improvements,or replacements),added to the asset's depreciable amount?

Acquisition cost is the amount of cash or cash equivalents paid,or the fair value of the other consideration given,to acquire an asset at the time of its acquisition.

What is the objective of any accelerated depreciation method?

Accounting: the Language of Business

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

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Exam 7: Tangible Fixed Assets

How is the depreciation expense calculated using the service quantity method?

What is another name for tangible assets?

How is the useful life of a tangible asset defined?

A multiple is needed to use the declining balance method of depreciation.How is the multiple chosen?

What is the distinguishing feature of a tangible asset compared to other fixed assets?

Under certain circumstances,the interest costs must be included in the cost of construction.What is this known as?

If an airplane jet engine which is kept in inventory to be used during maintenance operations or for a replacement,is treated as a tangible asset,which of the following statements is true?

How can the main depreciation methods be classified?

Which of the following equations is correct?

What is the most commonly accepted useful life for furniture?

Fixed assets can be divided into which three categories?

What is the term used for the specific depreciation of lands purchased as natural resources for a productive activity?

What is the unsystematic cost allocation called?

Which criterion (criteria)should capital expenditures meet?

At the time of capitalization of the costs incurred in the construction of the asset,expenses pertaining to the new asset must go through the income statement.

How is the depreciation expense calculated using the productive output method?

IAS 16 defines an 'impairment loss' as 'the amount by which the carrying amount of an asset exceeds its recoverable amount.'

Under what circumstances are costs incurred after the acquisition of an asset (such as additions,improvements,or replacements),added to the asset's depreciable amount?

Acquisition cost is the amount of cash or cash equivalents paid,or the fair value of the other consideration given,to acquire an asset at the time of its acquisition.

What is the objective of any accelerated depreciation method?

Accounting: the Language of Business

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters