Question 1

Long lived assets held for sale are classified as fixed assets.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Land acquired as a speculation is reported under Investments on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

On December 31, Strike Company has decided to sell one of its batting cages. The initial cost of the equipment was $215,000 with an accumulated depreciation of $185,000. 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 $25,000 
D)  Gain of $55,000 
A)  Cannot be determined 
B)  No gain or loss 
C)  Gain of $25,000 
D)  Gain of $55,000

Question 5

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 6

Minerals removed from the earth are classified as intangible assets.

Accepted Answer

A) True 
 B)False

Question 7

The accumulated depletion account is

Accepted Answer

A)  an expense account 
B)  an intangible asset account 
C)  reported on the income statement as other expense 
D)  reported on the balance sheet as a deduction from the cost of the mineral deposit 
A)  an expense account 
B)  an intangible asset account 
C)  reported on the income statement as other expense 
D)  reported on the balance sheet as a deduction from the cost of the mineral deposit

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

On the first day of the fiscal year, a new walk-in cooler with a list price of $52,000 was acquired in exchange for an old cooler and $42,000 cash. The old cooler had a cost $24,000 and accumulated depreciation of $17,000.
 a)Determine the gain to be recorded on the exchange.
b)Joumalize the entry to recort the exchange.

Accepted Answer

None

Question 10

An operating lease is accounted for as if the lessee has purchased the asset.

Accepted Answer

A) True 
 B)False

Question 11

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, the cost basis of the new asset is

Accepted Answer

A)  $54,000 
B)  $59,500 
C)  $60,000 
D)  $60,500 
A)  $54,000 
B)  $59,500 
C)  $60,000 
D)  $60,500

Question 12

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 13

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

Accepted Answer

A)  declining-balance 
B)  straight-line 
C)  units-of-production 
D)  MACRS 
A)  declining-balance 
B)  straight-line 
C)  units-of-production 
D)  MACRS

Question 14

Machinery acquired at a cost of $80,000 and on which there is accumulated depreciation of $50,000 (including depreciation for the current year to date) is exchanged for similar machinery. For financial reporting purposes, present entries to record the disposition of the old machinery and the acquisition of new machinery under each of the following assumptions:

Accepted Answer

The answer of Machinery acquired at a cost of $80,000...

Question 15

When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.

Accepted Answer

A) True 
 B)False

Question 16

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry (assuming the exchange was considered to have commercial substance):

Accepted Answer

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

Question 17

Copy equipment was acquired at the beginning of the year at a cost of $56,000 that has an estimated residual value of $8,000 and an estimated useful life of 5 years. It is estimated that the machine has an estimated 1,000,000 copies. This year 240,000 copies were made. Determine the (a) depreciable cost, (b) depreciation rate, and (c) the units-of-production depreciation for the year.

Accepted Answer

(a)@#LAT-DLM&
(b)@#LAT-DLM& pe

Question 18

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 19

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

Accepted Answer

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

Question 20

The Weber Company purchased a mining site for $500,000 on July 1, 2011. The company expects to mine ore for the next 10 years and anticipates that a total of 100,000 tons will be recovered. The estimated residual value of the property is $80,000. During 2011 the company extracted 4,000 tons of ore. The depletion expense for 2011 is

Accepted Answer

A)  $10,500 
B)  $43,200 
C)  $16,800 
D)  $20,000 
A)  $10,500 
B)  $43,200 
C)  $16,800 
D)  $20,000

Long lived assets held for sale are classified as fixed assets.

Residual value is also known as all of the following except

Land acquired as a speculation is reported under Investments on the balance sheet.

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

Minerals removed from the earth are classified as intangible assets.

The accumulated depletion account is

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.)

An operating lease is accounted for as if the lessee has purchased the asset.

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, the cost basis of the new asset is

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

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry (assuming the exchange was considered to have commercial substance):

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

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

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

Filters

Exam 9: Fixed Assets and Intangible Assets

Long lived assets held for sale are classified as fixed assets.

Residual value is also known as all of the following except

Land acquired as a speculation is reported under Investments on the balance sheet.

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

Minerals removed from the earth are classified as intangible assets.

The accumulated depletion account is

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.)

An operating lease is accounted for as if the lessee has purchased the asset.

A fixed asset with a cost of $52,000 and accumulated depreciation of $47,500 is traded for a similar asset priced at $60,000 in a transaction with commercial substance. Assuming a trade-in allowance of $5,000, the cost basis of the new asset is

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

When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is

When exchanging equipment, if the trade-in allowance is greater than the book value a loss results.

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry (assuming the exchange was considered to have commercial substance):

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

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

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

Filters