Question 1

The economic value of a building may decline below its book value but an impairment loss would not be recognized when the

Accepted Answer

A) undiscounted future cash flows exceed its book value. 
B) undiscounted future cash flows exceed its market value. 
C) discounted future cash flows exceed its book value. 
D) discounted future cash flows exceed its market value. 
E) discounted future cash flows exceed its liquidation value. 
A) undiscounted future cash flows exceed its book value. 
B) undiscounted future cash flows exceed its market value. 
C) discounted future cash flows exceed its book value. 
D) discounted future cash flows exceed its market value. 
E) discounted future cash flows exceed its liquidation value.

Question 2

Chen Company Chen Company office equipment costs $10,000, has an expected life of four years and a salvage value of $400.The firm has depreciated this asset on a straight-line basis.The firm has recorded depreciation for two years and then sells the equipment at midyear in the third year.
If the Chen Company sells the equipment for $4,000 cash, the entry to record the sale would be as follows:

Accepted Answer

A) Cash ........................ ..........................4,000 
Accumulated Depreciation ............ 6,000
Equipment ........................... 10,000 
B) Cash ...........................6,000 
Accumulated Depreciation ............... 4,000
Equipment ................. 10,000 
C) Equipment ...................10,000 
Cash ......................... 4,000
Accumulated Depreciation ..................6,000 
D) Equipment ..........................10,000 
Cash ................ 6,000
Accumulated Depreciation ...................4,000 
E) Equipment ..........................10,000 
Cash ............................ 6,000
Salvage Value . . . . . . ................ 4,000 
A) Cash ........................ ..........................4,000 
Accumulated Depreciation ............ 6,000
Equipment ........................... 10,000 
B) Cash ...........................6,000 
Accumulated Depreciation ............... 4,000
Equipment ................. 10,000 
C) Equipment ...................10,000 
Cash ......................... 4,000
Accumulated Depreciation ..................6,000 
D) Equipment ..........................10,000 
Cash ................ 6,000
Accumulated Depreciation ...................4,000 
E) Equipment ..........................10,000 
Cash ............................ 6,000
Salvage Value . . . . . . ................ 4,000

Question 3

U.S.GAAP permits firms to increase the balance sheet carrying values of tangible and intangible long-lived assets when the fair values of their assets increase.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is/are intangible assets with a finite useful life?

Accepted Answer

A) Customer List and User Base 
B) Trade Names and Trademarks 
C) Developed Technologies 
D) Network Access Agreements 
E) all of the above 
A) Customer List and User Base 
B) Trade Names and Trademarks 
C) Developed Technologies 
D) Network Access Agreements 
E) all of the above

Question 5

Discuss the presentation of long-lived assets in the balance sheet and income statement.

Accepted Answer

FINANCIAL STATEMENT PRESENTATION
This se

Question 6

Discuss the factors a firm considers when choosing among the alternative depreciation and amortization methods.

Accepted Answer

FACTORS IN CHOOSING THE DEPRECIATION AND

Question 7

Which of the following is not true about goodwill?

Accepted Answer

A) Goodwill reflects the value of knowledgeable employees. 
B) Goodwill reflects the value of a reputation for quality products. 
C) Under U.S.GAAP, goodwill has an indefinite life, and firms do not amortize the amount recognized as goodwill. 
D) Firms must test goodwill annually for a loss in value. 
E) Under IFRS, goodwill has an indefinite life, and firms amortize the amount recognized as goodwill. 
A) Goodwill reflects the value of knowledgeable employees. 
B) Goodwill reflects the value of a reputation for quality products. 
C) Under U.S.GAAP, goodwill has an indefinite life, and firms do not amortize the amount recognized as goodwill. 
D) Firms must test goodwill annually for a loss in value. 
E) Under IFRS, goodwill has an indefinite life, and firms amortize the amount recognized as goodwill.

Question 8

Which of the following is/are true about goodwill?

Accepted Answer

A) Goodwill reflects the value of knowledgeable employees. 
B) Goodwill reflects the value of a reputation for quality products. 
C) Under both U.S.GAAP and IFRS, goodwill has an indefinite life, and firms do not amortize the amount recognized as goodwill. 
D) Firms must test goodwill annually for a loss in value. 
E) all of the above 
A) Goodwill reflects the value of knowledgeable employees. 
B) Goodwill reflects the value of a reputation for quality products. 
C) Under both U.S.GAAP and IFRS, goodwill has an indefinite life, and firms do not amortize the amount recognized as goodwill. 
D) Firms must test goodwill annually for a loss in value. 
E) all of the above

Question 9

Applying IFRS, the test for an impairment loss for long-lived assets other than nonamortized intangibles and goodwill compares the balance sheet carrying value with the asset's

Accepted Answer

A) recoverable amount. 
B) sum of the undiscounted cash flows. 
C) sum of the discounted cash flows. 
D) expected future value. 
E) fair market value. 
A) recoverable amount. 
B) sum of the undiscounted cash flows. 
C) sum of the discounted cash flows. 
D) expected future value. 
E) fair market value.

Question 10

For many technology and pharmaceutical firms:

Accepted Answer

A) a large portion of their value to an acquirer might relate to in-process research and development (IPR&
D) . 
B) in-process research and development (IPR&
D)  acquired in a business combination that meets the separability criterion as an asset is recognized and measured initially at fair value. 
C) The firm that developed the in-process research and development (IPR&
D)  expensed the costs as they were incurred. 
D) all of the above 
E) none of the above 
A) a large portion of their value to an acquirer might relate to in-process research and development (IPR&
D) . 
B) in-process research and development (IPR&
D)  acquired in a business combination that meets the separability criterion as an asset is recognized and measured initially at fair value. 
C) The firm that developed the in-process research and development (IPR&
D)  expensed the costs as they were incurred. 
D) all of the above 
E) none of the above

Question 11

Intangible long-lived assets include:

Accepted Answer

A) patents. 
B) brand names. 
C) trademarks. 
D) customer lists. 
E) all of the above 
A) patents. 
B) brand names. 
C) trademarks. 
D) customer lists. 
E) all of the above

Question 12

U.S.GAAP requires firms to expense research and development (R&D) costs in the period incurred.

Accepted Answer

A) True 
 B)False

Question 13

Clarion Realty has decided to construct its own office building.The construction will be partially financed through a construction loan and any remainder will be financed from internally generated funds.The internal accountants have collected the following information concerning the construction.
$\begin{array}{llll}
& \text { Average Balance } & \text { Construction } & \text { Other } \
\text { Year } & \text { Construction Account } & \text { Debt } @ 6 \% & \text { Debt }(10 \%\
1 & \$ 2,000,000 & \$ 1,000,000 & \$ 500,000 \
2 & \$ 4,000,000 & \$ 1,000,000 & \$ 250,000 \
3 & \$ 3,000,000 & \$ 800,000 & \$ 200,000
\end{array}$ The amount, if any, of capitalized interest cost for Year 2 is

Accepted Answer

A) $0 
B) $50,000 
C) $60,000 
D) $180,000 
E) $230,000 
A) $0 
B) $50,000 
C) $60,000 
D) $180,000 
E) $230,000

Question 14

Depreciation is the accounting term used to refer to the periodic write-off of intangible assets.

Accepted Answer

A) True 
 B)False

Question 15

Clarion Realty Clarion Realty has decided to construct its own office building.The construction will be partially financed through a construction loan and any remainder will be financed from internally generated funds.The internal accountants have collected the following information concerning the construction.
$\begin{array}{llll}& \text { Average Balance } & \text { Construction } & \text { Other } \
\text { Year } & \text { Construction Account } & \text { Debt } @ 6 \% & \text { Debt@ } 10 \%\
1 & \$ 2,000,000 & \$ 1,000,000 & \$ 500,000 \
2 & \$ 4,000,000 & \$ 1,000,000 & \$ 250,000 \
3 & \$ 3,000.000 & \$ 800.000 & \$ 200.000
\end{array}$ The amount, if any, of capitalized interest cost for Year 1 is

Accepted Answer

A) $0 
B) $50,000 
C) $60,000 
D) $110,000 
E) $170,000 
A) $0 
B) $50,000 
C) $60,000 
D) $110,000 
E) $170,000

Question 16

The financial statements and notes provide information for analyzing changes in property, plant, and equipment.What ratio(s) is/are used by analysts?

Accepted Answer

A) Fixed Asset Turnover 
B) Proportion of Depreciable Assets 
C) Average Age of Depreciable Assets 
D) all of the above 
E) none of the above 
A) Fixed Asset Turnover 
B) Proportion of Depreciable Assets 
C) Average Age of Depreciable Assets 
D) all of the above 
E) none of the above

Question 17

The Barker Company purchased equipment in Year 1 at a cost of $26,000.The equipment was estimated to last for 8 years and have a salvage value of $2,000.In Year 5, it was determined that the life of the equipment was really 12 years, and the salvage value was expected to remain unchanged.What amount of depreciation was recorded for the equipment for years 1 through 12? The firm uses the straight-line method of depreciation.

Accepted Answer

The answer of The Barker Company purchased equipment in Year...

Question 18

On January 1, Year 1, Young Company purchased a machine for $6,000.It had an estimated salvage value of $1,200 and a life of six years.The straight-line method of depreciation was used.At midyear in Year 4, Young sold the machine for $4,500 cash.
Required:
 a.	What is the book value of the machine at the time of the sale?
b.	Give the journal entry to record the sale of the machine.

Accepted Answer

The answer of On January 1, Year 1, Young Company...

Question 19

How do firms account for expenditures to maintain or improve long-lived assets?

Accepted Answer

ADDITIONAL EXPENDITURES TO MAINTAIN OR I

Question 20

In a corporate acquisition the:

Accepted Answer

A) purchase price measures the fair value of the acquired enterprise. 
B) goodwill reflects the fair value of assets that cannot be separately identify. 
C) goodwill is an asset because it is part of the fair value of the acquired firm. 
D) all of the above 
E) none of the above 
A) purchase price measures the fair value of the acquired enterprise. 
B) goodwill reflects the fair value of assets that cannot be separately identify. 
C) goodwill is an asset because it is part of the fair value of the acquired firm. 
D) all of the above 
E) none of the above

The economic value of a building may decline below its book value but an impairment loss would not be recognized when the

U.S.GAAP permits firms to increase the balance sheet carrying values of tangible and intangible long-lived assets when the fair values of their assets increase.

Which of the following is/are intangible assets with a finite useful life?

Discuss the presentation of long-lived assets in the balance sheet and income statement.

Discuss the factors a firm considers when choosing among the alternative depreciation and amortization methods.

Which of the following is not true about goodwill?

Which of the following is/are true about goodwill?

Applying IFRS, the test for an impairment loss for long-lived assets other than nonamortized intangibles and goodwill compares the balance sheet carrying value with the asset's

For many technology and pharmaceutical firms:

Intangible long-lived assets include:

U.S.GAAP requires firms to expense research and development (R&D) costs in the period incurred.

Depreciation is the accounting term used to refer to the periodic write-off of intangible assets.

The financial statements and notes provide information for analyzing changes in property, plant, and equipment.What ratio(s) is/are used by analysts?

How do firms account for expenditures to maintain or improve long-lived assets?

In a corporate acquisition the:

Introduction to Business Activities and Overview of Financial Statements and the Reporting Process

The Basics of Record Keeping and Financial Statement Preparation: Balance Sheet

The Basics of Record Keeping and Financial Statement Preparation: Income Statement

Balance Sheet: Presenting and Analyzing Resources and Financing

Income Statement: Reporting Results of Operating Activities

Statement of Cash Flows

Introduction to Financial Statement Analysis

Revenue Recognition, Receivables, and Advances From Customers

Working Capital

Notes, Bonds, and Leases

Liabilities: Off-Balance Sheet Financing, Retirement Benefits, and Income Taxes

Marketable Securities and Derivatives

Intercorporate Investments in Common Stock

Shareholders Equity: Capital Contributions and Distributions

Statement of Cash Flows: Another Look

Synthesis and Extensions

Filters

Exam 10: Long-Lived Tangible and Intangible Assets

The economic value of a building may decline below its book value but an impairment loss would not be recognized when the

U.S.GAAP permits firms to increase the balance sheet carrying values of tangible and intangible long-lived assets when the fair values of their assets increase.

Which of the following is/are intangible assets with a finite useful life?

Discuss the presentation of long-lived assets in the balance sheet and income statement.

Discuss the factors a firm considers when choosing among the alternative depreciation and amortization methods.

Which of the following is not true about goodwill?

Which of the following is/are true about goodwill?

Applying IFRS, the test for an impairment loss for long-lived assets other than nonamortized intangibles and goodwill compares the balance sheet carrying value with the asset's

For many technology and pharmaceutical firms:

Intangible long-lived assets include:

U.S.GAAP requires firms to expense research and development (R&D) costs in the period incurred.

Depreciation is the accounting term used to refer to the periodic write-off of intangible assets.

The financial statements and notes provide information for analyzing changes in property, plant, and equipment.What ratio(s) is/are used by analysts?

How do firms account for expenditures to maintain or improve long-lived assets?

In a corporate acquisition the:

Introduction to Business Activities and Overview of Financial Statements and the Reporting Process

The Basics of Record Keeping and Financial Statement Preparation: Balance Sheet

The Basics of Record Keeping and Financial Statement Preparation: Income Statement

Balance Sheet: Presenting and Analyzing Resources and Financing

Income Statement: Reporting Results of Operating Activities

Statement of Cash Flows

Introduction to Financial Statement Analysis

Revenue Recognition, Receivables, and Advances From Customers

Working Capital

Notes, Bonds, and Leases

Liabilities: Off-Balance Sheet Financing, Retirement Benefits, and Income Taxes

Marketable Securities and Derivatives

Intercorporate Investments in Common Stock

Shareholders Equity: Capital Contributions and Distributions

Statement of Cash Flows: Another Look

Synthesis and Extensions

Filters