Question 1

The book or carrying value of an asset is:

Accepted Answer

A) its acquisition cost less the accumulated amortization from the acquisition date to the balance sheet date. 
B) its acquisition cost plus accumulated amortization from the acquisition date to the balance sheet date. 
C) the amount that could be obtained for the asset on the balance sheet date if it were sold. 
D) the annual cost of carrying the asset in inventory. 
A) its acquisition cost less the accumulated amortization from the acquisition date to the balance sheet date. 
B) its acquisition cost plus accumulated amortization from the acquisition date to the balance sheet date. 
C) the amount that could be obtained for the asset on the balance sheet date if it were sold. 
D) the annual cost of carrying the asset in inventory.

Question 2

Recall that the Fixed Asset Turnover Ratio equals Net Sales Revenue divided by Average Net Fixed Assets.Assume that,prior to preparing adjusting entries at the end of the year,Caterpillar Corporation has a fixed asset turnover ratio of 3.4 based on average net fixed assets of $500,000,000.Which of the following year-end adjustments would cause Caterpillar's fixed asset turnover ratio to increase?

Accepted Answer

A) Caterpillar accrues and capitalizes $50,000 of interest for self-constructed assets. 
B) Caterpillar accrues a liability for ordinary repair costs in the amount of $50,000. 
C) Caterpillar writes-down an impaired piece of equipment by $50,000. 
D) None of the above. 
A) Caterpillar accrues and capitalizes $50,000 of interest for self-constructed assets. 
B) Caterpillar accrues a liability for ordinary repair costs in the amount of $50,000. 
C) Caterpillar writes-down an impaired piece of equipment by $50,000. 
D) None of the above.

Question 3

?

Accepted Answer

A) $21,600 
B) $22,000 
C) $22,400 
D) $34,000 
A) $21,600 
B) $22,000 
C) $22,400 
D) $34,000

Question 4

Company A uses an accelerated amortization method while Company B uses the straight-line method for an asset of the same cost and useful life.Other things being equal,which of the following is true?

Accepted Answer

A) Company A will have higher net income in the early years but Company B will have higher net income towards the end of the asset's useful life. 
B) Company A will consistently have the larger net income until residual value is reached. 
C) Company B will have higher net income in the early years but Company A will have higher net income towards the end of the asset's useful life. 
D) Company B will consistently have the larger net income until residual value is reached. 
A) Company A will have higher net income in the early years but Company B will have higher net income towards the end of the asset's useful life. 
B) Company A will consistently have the larger net income until residual value is reached. 
C) Company B will have higher net income in the early years but Company A will have higher net income towards the end of the asset's useful life. 
D) Company B will consistently have the larger net income until residual value is reached.

Question 5

Research and development costs are treated as a capital expenditure.
BT: Knowledge

Accepted Answer

A) True 
 B)False

Question 6

Assuming no additions,replacements,or extraordinary repairs,the carrying value of a long-lived asset is never more than its original cost.
BT: Comprehension

Accepted Answer

A) True 
 B)False

Question 7

Long-lived assets are assets that are intended for resale.
BT: Knowledge

Accepted Answer

The answer of Long-lived assets are assets that are intended...

Question 8

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization rate is:

Accepted Answer

A) $0.95 per unit. 
B) $0.19 per unit. 
C) $0.05 per unit. 
D) $1.00 per unit. 
A) $0.95 per unit. 
B) $0.19 per unit. 
C) $0.05 per unit. 
D) $1.00 per unit.

Question 9

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of amortization on the equipment is $40,000 a year.Before recording the asset sale,the company should debit:

Accepted Answer

A) amortization expense for $40,000 and credit long-lived assets for $40,000. 
B) accumulated amortization for $40,000 and credit cash for $40,000. 
C) amortization expense for $20,000 and credit accumulated amortization for $20,000. 
D) cash for $20,000 and credit amortization expense for $20,000. 
A) amortization expense for $40,000 and credit long-lived assets for $40,000. 
B) accumulated amortization for $40,000 and credit cash for $40,000. 
C) amortization expense for $20,000 and credit accumulated amortization for $20,000. 
D) cash for $20,000 and credit amortization expense for $20,000.

Question 10

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The amortizable cost of the facility is:

Accepted Answer

A) $117,000. 
B) $151,000. 
C) $268,000. 
D) $107,000 
A) $117,000. 
B) $151,000. 
C) $268,000. 
D) $107,000

Question 11

How will the costs of an intangible asset being develop internally or self-constructed be reported?

Accepted Answer

A) As capital expenditure 
B) As research and development expenses 
C) As marketing expenses 
D) As a liability 
A) As capital expenditure 
B) As research and development expenses 
C) As marketing expenses 
D) As a liability

Question 12

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

Accepted Answer

A) a gain,increasing net income and shareholders' equity. 
B) revenue,increasing net income and shareholders' equity. 
C) cash,increasing assets and shareholders' equity. 
D) accumulated amortization,increasing assets and shareholders' equity. 
A) a gain,increasing net income and shareholders' equity. 
B) revenue,increasing net income and shareholders' equity. 
C) cash,increasing assets and shareholders' equity. 
D) accumulated amortization,increasing assets and shareholders' equity.

The book or carrying value of an asset is:

?

Company A uses an accelerated amortization method while Company B uses the straight-line method for an asset of the same cost and useful life.Other things being equal,which of the following is true?

Research and development costs are treated as a capital expenditure. BT: Knowledge

Assuming no additions,replacements,or extraordinary repairs,the carrying value of a long-lived asset is never more than its original cost. BT: Comprehension

Long-lived assets are assets that are intended for resale. BT: Knowledge

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization rate is:

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of amortization on the equipment is $40,000 a year.Before recording the asset sale,the company should debit:

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The amortizable cost of the facility is:

How will the costs of an intangible asset being develop internally or self-constructed be reported?

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

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 book or carrying value of an asset is:

?

Company A uses an accelerated amortization method while Company B uses the straight-line method for an asset of the same cost and useful life.Other things being equal,which of the following is true?

Research and development costs are treated as a capital expenditure. BT: Knowledge

Assuming no additions,replacements,or extraordinary repairs,the carrying value of a long-lived asset is never more than its original cost. BT: Comprehension

Long-lived assets are assets that are intended for resale. BT: Knowledge

The Widget Tool and Die Company buys a $400,000 stamping machine that has an estimated residual value of $20,000.The company expects the machine to produce two million units.It makes 400,000 units during the current period.If the units-of-production method is used,the amortization rate is:

A company sells a piece of equipment half-way through the accounting period.The straight-line rate of amortization on the equipment is $40,000 a year.Before recording the asset sale,the company should debit:

Purrfect Pets has a facility that originally cost $375,000.The balance of the accumulated amortization account for the facility is $258,000.The company expects to be able to sell the facility for $107,000 at the end of its useful life.The amortizable cost of the facility is:

How will the costs of an intangible asset being develop internally or self-constructed be reported?

A book manufacturing company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:

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