Question 1

The amount of net income will be higher in case of straight line amortization as compared to double declining method.
BT: Comprehension

Accepted Answer

A) True 
 B)False  False

Question 2

Another name for a tangible long-lived asset is a fixed asset.
BT: Knowledge

Accepted Answer

A) True 
 B)False  True

Question 3

When a company sells equipment for cash on a date other than the last day of the accounting period,it must record:

Accepted Answer

A) amortization expense for the entire accounting period during which the equipment is sold. 
B) the disposal by reducing equipment and increasing revenue; a gain or loss is reported if the decrease and increase are not equal. 
C) the disposal by decreasing both equipment and accumulated amortization while increasing cash; a gain is reported if total assets increase. 
D) accumulated amortization for the entire current accounting period. 
A) amortization expense for the entire accounting period during which the equipment is sold. 
B) the disposal by reducing equipment and increasing revenue; a gain or loss is reported if the decrease and increase are not equal. 
C) the disposal by decreasing both equipment and accumulated amortization while increasing cash; a gain is reported if total assets increase. 
D) accumulated amortization for the entire current accounting period. C

Question 4

Which of the following methods would be a typical choice for assets that are most productive when they are new but lose their utility quickly as they get older?

Accepted Answer

A) Straight line method 
B) Double declining method 
C) Units of production method 
D) Depletion 
A) Straight line method 
B) Double declining method 
C) Units of production method 
D) Depletion

Question 5

A truck costing $12,000 and on which $9,000 of accumulated amortization has been recorded was disposed of for $2,000 cash.The entry to record this event would include a:

Accepted Answer

A) gain of $1,000. 
B) loss of $1,000. 
C) credit to the Truck account for $3,000. 
D) credit to Accumulated amortization for $9,000. 
A) gain of $1,000. 
B) loss of $1,000. 
C) credit to the Truck account for $3,000. 
D) credit to Accumulated amortization for $9,000.

Question 6

IBM's website is an example of a:

Accepted Answer

A) patented intangible asset. 
B) technology intangible asset. 
C) current tangible asset. 
D) copyright tangible asset. 
A) patented intangible asset. 
B) technology intangible asset. 
C) current tangible asset. 
D) copyright tangible asset.

Question 7

Ordinary repairs and maintenance always:

Accepted Answer

A) are part of the asset cost of equipment and facilities. 
B) are recorded as expenses. 
C) are recorded as liabilities. 
D) improve the asset beyond the current accounting period. 
A) are part of the asset cost of equipment and facilities. 
B) are recorded as expenses. 
C) are recorded as liabilities. 
D) improve the asset beyond the current accounting period.

Question 8

Capitalizing costs refers to the process of converting assets to expenses.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 9

When assets are purchased as a group,the total cost must be divided up and allocated to each asset in proportion to the market value of the assets as a whole.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 10

Match the term and the explanation.Not all explanations will be used. _____ Long-lived assets
_____ Average net fixed assets
_____ Capitalization of cost
_____ Units-of-production method
_____ Carrying value
_____ Asset impairment loss
_____ Amortization
_____ Net sales revenue
_____ Declining-balance method

Accepted Answer

A) The average proportion of a company's total assets that is long-lived. 
B) An amortization method that produces higher amounts of amortization expense in the early years of an asset's life and lower amounts in the later years. 
C) The cost of financing an asset. 
D) Also known as book value. 
E) Assets that will be used for more than three years. 
F)The denominator of the fixed asset turnover ratio.
G)Also known as the average total cost of production.
H)How expenses are reported in the income statement.
I)An amortization method that spreads asset cost by production rather than time.
J)Also known as the initial value or balance forward value.
K)Assets that will be used for more than a year.
L)The process of transferring the cost of long-lived tangible assets to expenses.
M)When a company writes down the value of an asset when estimated future cash flows fall below the original level estimated.
N)The numerator of the fixed asset turnover ratio.
O)When costs are recorded as assets rather than expenses.
P)When a company writes down the value of an asset because estimated future cash flows fall below the book value. 
A) The average proportion of a company's total assets that is long-lived. 
B) An amortization method that produces higher amounts of amortization expense in the early years of an asset's life and lower amounts in the later years. 
C) The cost of financing an asset. 
D) Also known as book value. 
E) Assets that will be used for more than three years. 
F)The denominator of the fixed asset turnover ratio.
G)Also known as the average total cost of production.
H)How expenses are reported in the income statement.
I)An amortization method that spreads asset cost by production rather than time.
J)Also known as the initial value or balance forward value.
K)Assets that will be used for more than a year.
L)The process of transferring the cost of long-lived tangible assets to expenses.
M)When a company writes down the value of an asset when estimated future cash flows fall below the original level estimated.
N)The numerator of the fixed asset turnover ratio.
O)When costs are recorded as assets rather than expenses.
P)When a company writes down the value of an asset because estimated future cash flows fall below the book value.

Question 11

Asset impairment losses are a regular operating expense of most businesses.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 12

Amortization and maintenance are expenses associated with the use of long-lived assets.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 13

Which of McGraw-Hill's intangible assets gives it the legal right to prevent you from borrowing a textbook from a friend and photocopying all of it?

Accepted Answer

A) Patent 
B) Trademark 
C) Franchise agreement 
D) Copyright 
A) Patent 
B) Trademark 
C) Franchise agreement 
D) Copyright

Question 14

If a fully amortized asset with no residual value is retired without receiving any cash on retirement:

Accepted Answer

A) a gain on disposal will be recorded. 
B) amortization must be recorded as though the asset were still on the books. 
C) a loss on disposal will be recorded. 
D) no gain or loss on disposal will be recorded. 
A) a gain on disposal will be recorded. 
B) amortization must be recorded as though the asset were still on the books. 
C) a loss on disposal will be recorded. 
D) no gain or loss on disposal will be recorded.

Question 15

Match the term and the explanation.Not all explanations will be used.
_____ Long-lived assets
_____ Average net fixed assets
_____ Capitalization of cost
_____ Units-of-production method
_____ Carrying value
_____ Asset impairment loss
_____ Amortization
_____ Net sales revenue
_____ Declining-balance method
A.The average proportion of a company's total assets that is long-lived.
B.An amortization method that produces higher amounts of amortization expense in the early years of an asset's life and lower amounts in the later years.
C.The cost of financing an asset.
D.Also known as book value.
E.Assets that will be used for more than three years.
F.The denominator of the fixed asset turnover ratio.
G.Also known as the average total cost of production.
H.How expenses are reported in the income statement.
I.An amortization method that spreads asset cost by production rather than time.
J.Also known as the initial value or balance forward value.
K.Assets that will be used for more than a year.
L.The process of transferring the cost of long-lived tangible assets to expenses.
M.When a company writes down the value of an asset when estimated future cash flows fall below the original level estimated.
N.The numerator of the fixed asset turnover ratio.
O.When costs are recorded as assets rather than expenses.
P.When a company writes down the value of an asset because estimated future cash flows fall below the book value.

Accepted Answer

The answer of Match the term and the explanation.Not all...

Question 16

Some analysts compare companies by focusing on earnings before interest,taxes,and amortization (EBITDA).
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 17

The company has net sales revenue of $3.6 million during 2009.The company's records also included the following information: What is the company's fixed asset turnover ratio for 2009?

Accepted Answer

A) 18.00 
B) 1.33 
C) 1.00 
D) 1.50 
A) 18.00 
B) 1.33 
C) 1.00 
D) 1.50

Question 18

What would be the amount of amortization expense in year 2 using the straight line amortization method?

Accepted Answer

A) $6,500.00 
B) $5,900.00 
C) $10,400.00 
D) $6,555.55 
A) $6,500.00 
B) $5,900.00 
C) $10,400.00 
D) $6,555.55

Question 19

The fixed asset turnover ratio measures the:

Accepted Answer

A) useful life of long-lived assets. 
B) the average difference between book value and disposal value of fixed assets. 
C) useful life of intangible assets. 
D) efficiency with which the investment in fixed assets produces revenue. 
A) useful life of long-lived assets. 
B) the average difference between book value and disposal value of fixed assets. 
C) useful life of intangible assets. 
D) efficiency with which the investment in fixed assets produces revenue.

Question 20

When a company determines that estimated future cash flows from an asset are different from the book value of the asset,it records:

Accepted Answer

A) an asset impairment gain,if the value of the cash flows exceeds the asset's book value. 
B) an asset impairment loss,if the value of the cash flows exceeds the asset's book value. 
C) an asset impairment gain,if the asset's book value exceeds the value of the cash flows. 
D) an asset impairment loss,if the asset's book value exceeds the value of the cash flows. 
A) an asset impairment gain,if the value of the cash flows exceeds the asset's book value. 
B) an asset impairment loss,if the value of the cash flows exceeds the asset's book value. 
C) an asset impairment gain,if the asset's book value exceeds the value of the cash flows. 
D) an asset impairment loss,if the asset's book value exceeds the value of the cash flows.

The amount of net income will be higher in case of straight line amortization as compared to double declining method. BT: Comprehension

Another name for a tangible long-lived asset is a fixed asset. BT: Knowledge

When a company sells equipment for cash on a date other than the last day of the accounting period,it must record:

Which of the following methods would be a typical choice for assets that are most productive when they are new but lose their utility quickly as they get older?

A truck costing $12,000 and on which $9,000 of accumulated amortization has been recorded was disposed of for $2,000 cash.The entry to record this event would include a:

IBM's website is an example of a:

Ordinary repairs and maintenance always:

Capitalizing costs refers to the process of converting assets to expenses. BT: Comprehension

When assets are purchased as a group,the total cost must be divided up and allocated to each asset in proportion to the market value of the assets as a whole. BT: Knowledge

Match the term and the explanation.Not all explanations will be used. ___ Long-lived assets _ Average net fixed assets _ Capitalization of cost _ Units-of-production method _ Carrying value _ Asset impairment loss _ Amortization _ Net sales revenue ___ Declining-balance method

Asset impairment losses are a regular operating expense of most businesses. BT: Comprehension

Amortization and maintenance are expenses associated with the use of long-lived assets. BT: Knowledge

Which of McGraw-Hill's intangible assets gives it the legal right to prevent you from borrowing a textbook from a friend and photocopying all of it?

If a fully amortized asset with no residual value is retired without receiving any cash on retirement:

Some analysts compare companies by focusing on earnings before interest,taxes,and amortization (EBITDA). BT: Knowledge

The company has net sales revenue of $3.6 million during 2009.The company's records also included the following information: What is the company's fixed asset turnover ratio for 2009?

What would be the amount of amortization expense in year 2 using the straight line amortization method?

The fixed asset turnover ratio measures the:

When a company determines that estimated future cash flows from an asset are different from the book value of the asset,it records:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,financial Statements,and Financial Results

Fraud,internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables, bad Debt Expense, and Interest Revenue

Liabilities

Stockholders Equity

Statement Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 9: Long-Lived Tangible and Intangible Assets

The amount of net income will be higher in case of straight line amortization as compared to double declining method. BT: Comprehension

Another name for a tangible long-lived asset is a fixed asset. BT: Knowledge

When a company sells equipment for cash on a date other than the last day of the accounting period,it must record:

Which of the following methods would be a typical choice for assets that are most productive when they are new but lose their utility quickly as they get older?

A truck costing $12,000 and on which $9,000 of accumulated amortization has been recorded was disposed of for $2,000 cash.The entry to record this event would include a:

IBM's website is an example of a:

Ordinary repairs and maintenance always:

Capitalizing costs refers to the process of converting assets to expenses. BT: Comprehension

When assets are purchased as a group,the total cost must be divided up and allocated to each asset in proportion to the market value of the assets as a whole. BT: Knowledge

Asset impairment losses are a regular operating expense of most businesses. BT: Comprehension

Amortization and maintenance are expenses associated with the use of long-lived assets. BT: Knowledge

Which of McGraw-Hill's intangible assets gives it the legal right to prevent you from borrowing a textbook from a friend and photocopying all of it?

If a fully amortized asset with no residual value is retired without receiving any cash on retirement:

Some analysts compare companies by focusing on earnings before interest,taxes,and amortization (EBITDA). BT: Knowledge

The company has net sales revenue of $3.6 million during 2009.The company's records also included the following information: What is the company's fixed asset turnover ratio for 2009?

What would be the amount of amortization expense in year 2 using the straight line amortization method?

The fixed asset turnover ratio measures the:

When a company determines that estimated future cash flows from an asset are different from the book value of the asset,it records:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,financial Statements,and Financial Results

Fraud,internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables, bad Debt Expense, and Interest Revenue

Liabilities

Stockholders Equity

Statement Cash Flows

Measuring and Evaluating Financial Performance

Filters