Question 1

Which of the following should be included in the acquisition cost of a piece of equipment?

Accepted Answer

A) transportation costs 
B) installation costs 
C) testing costs prior to placing the equipment into production 
D) all are correct 
A) transportation costs 
B) installation costs 
C) testing costs prior to placing the equipment into production 
D) all are correct

Question 2

On December 31 it was estimated that goodwill of $65,000 was impaired.In addition,a patent with an estimated useful economic life of 10 years was acquired for $60,000 on July 1.

Accepted Answer

The answer of On December 31 it was estimated that...

Question 3

When a company replaces a component of property,plant and equipment,which statement below does not account for one of the steps in the process?

Accepted Answer

A) book value of the replaced component is written off to depreciation expense 
B) the asset cost of the replaced component is credited 
C) any cost to remove the old component is charged to expense 
D) the identifiable direct costs associated with the new component are capitalized 
A) book value of the replaced component is written off to depreciation expense 
B) the asset cost of the replaced component is credited 
C) any cost to remove the old component is charged to expense 
D) the identifiable direct costs associated with the new component are capitalized

Question 4

To a major resort,timeshare properties would be classified as property,plant and equipment.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true?

Accepted Answer

A) If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest. 
B) If using the units-of-production method,it is possible to depreciate more than the depreciable cost. 
C) If using the straight line method,the amount of depreciation expense during the first year is higher than that of the double-declining-balance. 
D) Regardless of the depreciation method,the amount of total depreciation expense during the life of the asset will be the same. 
A) If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest. 
B) If using the units-of-production method,it is possible to depreciate more than the depreciable cost. 
C) If using the straight line method,the amount of depreciation expense during the first year is higher than that of the double-declining-balance. 
D) Regardless of the depreciation method,the amount of total depreciation expense during the life of the asset will be the same.

Question 6

On December 31,Strike Company has decided to sell one of its batting cages.The initial cost of the equipment was $310,000 with an accumulated depreciation of $260,000.Depreciation has been taken up to the end of the year.The company found a company that is willing to buy the equipment for $55,000.What is the amount of the gain or loss on this transaction?

Accepted Answer

A) Cannot be determined 
B) No gain or loss 
C) Gain of $ 5,000 
D) Gain of $55,000 
A) Cannot be determined 
B) No gain or loss 
C) Gain of $ 5,000 
D) Gain of $55,000

Question 7

When a company exchanges machinery and receives a trade-in allowance less than the book value,this transaction would be recorded with the following entry:

Accepted Answer

A) debit Machinery and Accumulated Depreciation;credit Machinery and Cash 
B) debit Cash and Machinery;credit Accumulated Depreciation 
C) debit Cash and Machinery;credit Accumulated Depreciation and Machinery 
D) debit Machinery,Accumulated Depreciation,and Loss on Disposal;credit Machinery and Cash 
A) debit Machinery and Accumulated Depreciation;credit Machinery and Cash 
B) debit Cash and Machinery;credit Accumulated Depreciation 
C) debit Cash and Machinery;credit Accumulated Depreciation and Machinery 
D) debit Machinery,Accumulated Depreciation,and Loss on Disposal;credit Machinery and Cash

Question 8

If a fixed asset,such as a computer,were purchased on January 1st 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:
(Note: EOM indicates the last day of each month. )

Accepted Answer

A) EOM Depreciation Expense 100 Accumulated Depreciation 100 
B) EOM Depreciation Expense 1,200 Accumulated Depreciation 1,200 
C) EOM Accumulated Depreciation 1,200 Depreciation Expense 1,200 
D) EOM Accumulated Depreciation 100 Depreciation Expense 100 
A) EOM Depreciation Expense 100 Accumulated Depreciation 100 
B) EOM Depreciation Expense 1,200 Accumulated Depreciation 1,200 
C) EOM Accumulated Depreciation 1,200 Depreciation Expense 1,200 
D) EOM Accumulated Depreciation 100 Depreciation Expense 100

Question 9

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years,is $19,000 by the straight-line method.

Accepted Answer

A) True 
 B)False

Question 10

When a company discards machinery that is fully depreciated,this transaction would be recorded with the following entry

Accepted Answer

A) debit Accumulated Depreciation;credit Machinery 
B) debit Machinery;credit Accumulated Depreciation 
C) debit Cash;credit Accumulated Depreciation 
D) debit Depreciation Expense;credit Accumulated Depreciation 
A) debit Accumulated Depreciation;credit Machinery 
B) debit Machinery;credit Accumulated Depreciation 
C) debit Cash;credit Accumulated Depreciation 
D) debit Depreciation Expense;credit Accumulated Depreciation

Question 11

A number of major structural repairs completed at the beginning of the current fiscal year at a cost of $1,000,000 are expected to extend the life of a building 10 years beyond the original estimate.The original cost of the building was $6,552,000,and it has been depreciated by the straight-line method for 25 years.Estimated residual value is negligible and has been ignored.The related accumulated depreciation account after the depreciation adjustment at the end of the preceding fiscal year is $4,550,000.

Accepted Answer

The answer of A number of major structural repairs completed...

Question 12

An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) insurance costs during construction 
B) cost of paving 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 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 14

When cities give land or buildings to a company to locate in the community,no entry is made since there is no cost to the company.

Accepted Answer

A) True 
 B)False

Question 15

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 16

The normal balance of the accumulated depreciation account is debit.

Accepted Answer

A) True 
 B)False

Question 17

The exclusive right to use a certain name or symbol is called a

Accepted Answer

A) goodwill 
B) patent 
C) trademark 
D) copyright 
A) goodwill 
B) patent 
C) trademark 
D) copyright

Question 18

Prepare the following journal entries and calculations:

Accepted Answer

The answer of Prepare the following journal entries and calculations:
...

Question 19

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 20

The formula for depreciable cost is

Accepted Answer

A) initial cost + residual value 
B) initial cost - residual value 
C) initial cost - accumulated depreciation 
D) depreciable cost = initial cost 
A) initial cost + residual value 
B) initial cost - residual value 
C) initial cost - accumulated depreciation 
D) depreciable cost = initial cost

Which of the following should be included in the acquisition cost of a piece of equipment?

On December 31 it was estimated that goodwill of $65,000 was impaired.In addition,a patent with an estimated useful economic life of 10 years was acquired for $60,000 on July 1.

When a company replaces a component of property,plant and equipment,which statement below does not account for one of the steps in the process?

To a major resort,timeshare properties would be classified as property,plant and equipment.

Which of the following is true?

When a company exchanges machinery and receives a trade-in allowance less than the book value,this transaction would be recorded with the following entry:

If a fixed asset,such as a computer,were purchased on January 1st 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: (Note: EOM indicates the last day of each month. )

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years,is $19,000 by the straight-line method.

When a company discards machinery that is fully depreciated,this transaction would be recorded with the following entry

An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.

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

When cities give land or buildings to a company to locate in the community,no entry is made since there is no cost to the company.

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

The normal balance of the accumulated depreciation account is debit.

The exclusive right to use a certain name or symbol is called a

Prepare the following journal entries and calculations:

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

The formula for depreciable cost is

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Current Liabilities and Payroll

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 9: Fixed Assets and Intangible Assets

Which of the following should be included in the acquisition cost of a piece of equipment?

On December 31 it was estimated that goodwill of $65,000 was impaired.In addition,a patent with an estimated useful economic life of 10 years was acquired for $60,000 on July 1.

When a company replaces a component of property,plant and equipment,which statement below does not account for one of the steps in the process?

To a major resort,timeshare properties would be classified as property,plant and equipment.

Which of the following is true?

When a company exchanges machinery and receives a trade-in allowance less than the book value,this transaction would be recorded with the following entry:

If a fixed asset,such as a computer,were purchased on January 1st 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: (Note: EOM indicates the last day of each month. )

The amount of depreciation expense for the first full year of use of a fixed asset costing $95,000,with an estimated residual value of $5,000 and a useful life of 5 years,is $19,000 by the straight-line method.

When a company discards machinery that is fully depreciated,this transaction would be recorded with the following entry

An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.

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

When cities give land or buildings to a company to locate in the community,no entry is made since there is no cost to the company.

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

The normal balance of the accumulated depreciation account is debit.

The exclusive right to use a certain name or symbol is called a

Prepare the following journal entries and calculations:

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

The formula for depreciable cost is

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Current Liabilities and Payroll

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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