Question 1

Revenue expenditures on operational assets are accounted for as expenses,while capital expenditures are accounted for as assets.

Accepted Answer

A) True 
 B)False

Question 2

In 2012,WD Company reported the cost of its theme parks,resorts,and other assets at $14,037 million and the accumulated depreciation at $5,382 million.In that same year,"Toys 4 U" reported $5,610 million in operating assets and accumulated depreciation on them of $1,398 million.
1.Estimate the approximate remaining life of the assets for WD Company and "Toys 4 U"
2.Which company appears to have newer assets with longer remaining lives?

Accepted Answer

(1)a.62% ($14,037-$5,382)/$14,037; b.75%

Question 3

On March 1,Chapine Company purchased a new stamping machine for $5,000.Chapine paid cash for the machine.Other costs associated with the machine were: transportation costs,$300; sales tax paid,$200; and installation cost,$100.What cost was recorded for the machine?

Accepted Answer

A) $5,000 
B) $5,200 
C) $5,500 
D) $5,600 
A) $5,000 
B) $5,200 
C) $5,500 
D) $5,600

Question 4

On January 1,2012,Stacy Company purchased the College Book Store for $350,000.At the date of purchase,it was determined the recorded assets had a total market value of $325,000,comprised of inventory (books),$275,000; fixtures,$30,000; and other assets $20,000.It is estimated that the goodwill (if any)has an economic useful life of 20 years.What is the amount of amortization expense for goodwill for 2012?

Accepted Answer

A) $1,250 
B) $0 
C) $16,250 
D) $17,500 
A) $1,250 
B) $0 
C) $16,250 
D) $17,500

Question 5

Companies cannot change the method of depreciation adopted for a group of assets.

Accepted Answer

A) True 
 B)False

Question 6

To which account should the amount of sales tax paid on the purchase of new machinery should be debited?

Accepted Answer

A) A sales tax expense account. 
B) A separate deferred charge account. 
C) The machinery account. 
D) Accumulated depreciation for machinery. 
A) A sales tax expense account. 
B) A separate deferred charge account. 
C) The machinery account. 
D) Accumulated depreciation for machinery.

Question 7

WD Company reports profit in 2012 of $1,300 million and depreciation expense of $851 million.They also report investment in new theme parks,resorts,and other property of $2,134 million for 2012.Which of the following disclosures would appear on their statement of cash flows?

Accepted Answer

A) Depreciation of $851 million would be deducted from profit under operating activities and the $2,134 million would be added under investing activities 
B) Depreciation of $851 million would be added to profit under operating activities and the $2,134 million would be added under investing activities 
C) Depreciation of $851 million would be added to profit under operating activities and the $2,134 million would be deducted under investing activities 
D) Depreciation of $851 million would be deducted from profit under operating activities and the $2,134 million would be deducted under investing activities 
A) Depreciation of $851 million would be deducted from profit under operating activities and the $2,134 million would be added under investing activities 
B) Depreciation of $851 million would be added to profit under operating activities and the $2,134 million would be added under investing activities 
C) Depreciation of $851 million would be added to profit under operating activities and the $2,134 million would be deducted under investing activities 
D) Depreciation of $851 million would be deducted from profit under operating activities and the $2,134 million would be deducted under investing activities

Question 8

In 2012,WD Company reported the cost of their parks,resorts and other related property at $15,869 million and accumulated depreciation on these assets at $6,220 million.The remaining estimated life of these assets is approximately

Accepted Answer

A) 61%. 
B) 39%. 
C) 45%. 
D) Cannot be determined from the given information. 
A) 61%. 
B) 39%. 
C) 45%. 
D) Cannot be determined from the given information.

Question 9

Which of the following is false?

Accepted Answer

A) The book value at the end of an asset's useful life will be the same under all the depreciation methods allowed under IFRS. 
B) The total depreciation in the accumulated depreciation account will be the same at the end of the asset's useful life under all the methods allowed under IFRS. 
C) The annual depreciation expense will differ under the various depreciation methods. 
D) The annual depreciation expense using the straight-line method increases each year. 
A) The book value at the end of an asset's useful life will be the same under all the depreciation methods allowed under IFRS. 
B) The total depreciation in the accumulated depreciation account will be the same at the end of the asset's useful life under all the methods allowed under IFRS. 
C) The annual depreciation expense will differ under the various depreciation methods. 
D) The annual depreciation expense using the straight-line method increases each year.

Question 10

Carpenter Corporation purchased a mineral deposit,making payment as follows: Cash $10,000 and 6,000 Carpenter Corporation common shares.On the date of the purchase,the mineral deposit had an appraised value of $75,000; the common shares were quoted on the market at $11 per share.Other acquisition costs amounted to $3,000 cash.What was the cost recorded for the mineral deposit?

Accepted Answer

A) $70,000 
B) $73,000 
C) $75,000 
D) $79,000 
A) $70,000 
B) $73,000 
C) $75,000 
D) $79,000

Question 11

Belmont Corporation made a basket purchase of land,a building and equipment,paying a total of $1,500,000.Market values for the assets were not available,but the appraised values were $300,000 for the land,$900,000 for the building,and $600,000 for equipment.What amounts should be recorded in the Land,Building,and Equipment accounts,respectively?

Accepted Answer

A) $300,000,$900,000,and $600,000 
B) $1,500,000,$-0-,and $-0- 
C) $250,000,$750,000,and $500,000 
D) $500,000,$500,000,and $500,000 
A) $300,000,$900,000,and $600,000 
B) $1,500,000,$-0-,and $-0- 
C) $250,000,$750,000,and $500,000 
D) $500,000,$500,000,and $500,000

Question 12

On January 1,20A,Stern Company (a calendar year corporation)purchased a heavy duty machine having an invoice price of $13,000 plus transportation and installation costs of $3,000.The machine is estimated to have a 4-year useful life and a $1,000 residual value.Assuming the company uses the declining-balance method depreciation and a 150% acceleration rate,complete the following schedule (round to the nearest dollar).

Accepted Answer

* straight line rate: 1/4 = 0.25 Declini

Question 13

On January 1,20A,Reagan Company purchased a machine.The price quoted by the seller was $10,000 less 2% if paid within 15 days of the invoice date.Paid with cash were: transportation,$300; installation,$600; and sales tax,$200.Give the entry to record the acquisition assuming the discount was taken.

Accepted Answer

The answer of On January 1,20A,Reagan Company purchased a machine.The...

Question 14

Duval Company acquired a machine on January 1,20A,that cost $2,700 and had an estimated residual value of $200.Complete the following schedule using the three methods of depreciation: A.)straight-line,B.)units-of-production,C.)declining-balance at 150% acceleration rate.

Accepted Answer

The answer of Duval Company acquired a machine on January...

Question 15

What is the main purpose of recording depreciation?

Accepted Answer

A) To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. 
B) To estimate the remaining useful life of the asset. 
C) To report the asset on the statement of financial position at the estimated amount for which the asset could be sold on the statement of financial position date. 
D) To estimate the current replacement cost of the asset. 
A) To allocate the cost of a tangible asset to the periods in which its use contributes to earning revenue. 
B) To estimate the remaining useful life of the asset. 
C) To report the asset on the statement of financial position at the estimated amount for which the asset could be sold on the statement of financial position date. 
D) To estimate the current replacement cost of the asset.

Question 16

In 2012,DAL Co.had a fixed asset turnover of 1.63 compared to ABC Co.of 1.10.What is the most likely cause of DAL Co.'s higher ratio?

Accepted Answer

A) DAL Co.is less efficient in generating net sales from its operational assets. 
B) DAL Co.is more efficient at generating profit from employing its operational assets. 
C) DAL Co.is able to generate greater sales from its operational assets. 
D) DAL Co.is able to generate less profit from its operational assets. 
A) DAL Co.is less efficient in generating net sales from its operational assets. 
B) DAL Co.is more efficient at generating profit from employing its operational assets. 
C) DAL Co.is able to generate greater sales from its operational assets. 
D) DAL Co.is able to generate less profit from its operational assets.

Question 17

When either the estimated useful life or estimated residual value (or both)of an operational asset are changed,all prior financial statements are reissued reflecting the correction retroactively.

Accepted Answer

A) True 
 B)False

Question 18

When using the declining-balance method of depreciation,a declining percentage is applied to a constant book value.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following methods ordinarily would be the most appropriate to determine depletion of natural resources for financial reporting purposes?

Accepted Answer

A) Straight-line. 
B) Two hundred percent declining-balance. 
C) Specific identification. 
D) Units of production. 
A) Straight-line. 
B) Two hundred percent declining-balance. 
C) Specific identification. 
D) Units of production.

Question 20

All tangible operational assets (classified as property,plant,and equipment)are subject to depreciation.

Accepted Answer

A) True 
 B)False

Revenue expenditures on operational assets are accounted for as expenses,while capital expenditures are accounted for as assets.

On March 1,Chapine Company purchased a new stamping machine for $5,000.Chapine paid cash for the machine.Other costs associated with the machine were: transportation costs,$300; sales tax paid,$200; and installation cost,$100.What cost was recorded for the machine?

Companies cannot change the method of depreciation adopted for a group of assets.

To which account should the amount of sales tax paid on the purchase of new machinery should be debited?

WD Company reports profit in 2012 of $1,300 million and depreciation expense of $851 million.They also report investment in new theme parks,resorts,and other property of $2,134 million for 2012.Which of the following disclosures would appear on their statement of cash flows?

In 2012,WD Company reported the cost of their parks,resorts and other related property at $15,869 million and accumulated depreciation on these assets at $6,220 million.The remaining estimated life of these assets is approximately

Which of the following is false?

On January 1,20A,Reagan Company purchased a machine.The price quoted by the seller was $10,000 less 2% if paid within 15 days of the invoice date.Paid with cash were: transportation,$300; installation,$600; and sales tax,$200.Give the entry to record the acquisition assuming the discount was taken.

Duval Company acquired a machine on January 1,20A,that cost $2,700 and had an estimated residual value of $200.Complete the following schedule using the three methods of depreciation: A.)straight-line,B.)units-of-production,C.)declining-balance at 150% acceleration rate.

What is the main purpose of recording depreciation?

In 2012,DAL Co.had a fixed asset turnover of 1.63 compared to ABC Co.of 1.10.What is the most likely cause of DAL Co.'s higher ratio?

When either the estimated useful life or estimated residual value (or both)of an operational asset are changed,all prior financial statements are reissued reflecting the correction retroactively.

When using the declining-balance method of depreciation,a declining percentage is applied to a constant book value.

Which of the following methods ordinarily would be the most appropriate to determine depletion of natural resources for financial reporting purposes?

All tangible operational assets (classified as property,plant,and equipment)are subject to depreciation.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

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Exam 9: Reporting and Interpreting Liabilities

Revenue expenditures on operational assets are accounted for as expenses,while capital expenditures are accounted for as assets.

On March 1,Chapine Company purchased a new stamping machine for $5,000.Chapine paid cash for the machine.Other costs associated with the machine were: transportation costs,$300; sales tax paid,$200; and installation cost,$100.What cost was recorded for the machine?

Companies cannot change the method of depreciation adopted for a group of assets.

To which account should the amount of sales tax paid on the purchase of new machinery should be debited?

WD Company reports profit in 2012 of $1,300 million and depreciation expense of $851 million.They also report investment in new theme parks,resorts,and other property of $2,134 million for 2012.Which of the following disclosures would appear on their statement of cash flows?

In 2012,WD Company reported the cost of their parks,resorts and other related property at $15,869 million and accumulated depreciation on these assets at $6,220 million.The remaining estimated life of these assets is approximately

Which of the following is false?

On January 1,20A,Reagan Company purchased a machine.The price quoted by the seller was $10,000 less 2% if paid within 15 days of the invoice date.Paid with cash were: transportation,$300; installation,$600; and sales tax,$200.Give the entry to record the acquisition assuming the discount was taken.

Duval Company acquired a machine on January 1,20A,that cost $2,700 and had an estimated residual value of $200.Complete the following schedule using the three methods of depreciation: A.)straight-line,B.)units-of-production,C.)declining-balance at 150% acceleration rate.

What is the main purpose of recording depreciation?

In 2012,DAL Co.had a fixed asset turnover of 1.63 compared to ABC Co.of 1.10.What is the most likely cause of DAL Co.'s higher ratio?

When either the estimated useful life or estimated residual value (or both)of an operational asset are changed,all prior financial statements are reissued reflecting the correction retroactively.

When using the declining-balance method of depreciation,a declining percentage is applied to a constant book value.

Which of the following methods ordinarily would be the most appropriate to determine depletion of natural resources for financial reporting purposes?

All tangible operational assets (classified as property,plant,and equipment)are subject to depreciation.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue, receivables, and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property, plant, and Equipment; Intangibles; and Natural Resources

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

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