Question 1

Land is not depreciated because it

Accepted Answer

A) appreciates in value. 
B) does not have an established depreciable life. 
C) has a useful life that is limited to the period of time a company is in business 
D) will provide future benefits for a company for an unlimited period of time. 
A) appreciates in value. 
B) does not have an established depreciable life. 
C) has a useful life that is limited to the period of time a company is in business 
D) will provide future benefits for a company for an unlimited period of time.

Question 2

Explain the meaning or significance of the following ratios:

Accepted Answer

The answer of Explain the meaning or significance of the...

Question 3

Royal Company purchased a dump truck at the beginning of 2012 at a cost of $50,000.The truck had an estimated life of 5 years and an estimated residual value of $20,000.On January 1,2014,the company made major repairs of $30,000 to the truck that extended the life 3 years.Thus,starting with 2014,the truck has a remaining life of 5 years and a new salvage value of $8,000.Royal uses the straight-line depreciation method When calculating depreciation for 2014,Royal should

Accepted Answer

A) add the $30,000 to the book value at December 31,2013 and then allocate the revised basis over the remaining adjusted useful life of 5 years. 
B) report the effect of the change in life as an expense on the income statement in 2012. 
C) ignore the change in life on the original cost of $50,000 and depreciate the additional $30,000 cost separately over its useful life. 
D) expense the $30,000 and depreciate the original cost of $50,000 over its revised estimated total live of 7 years. 
A) add the $30,000 to the book value at December 31,2013 and then allocate the revised basis over the remaining adjusted useful life of 5 years. 
B) report the effect of the change in life as an expense on the income statement in 2012. 
C) ignore the change in life on the original cost of $50,000 and depreciate the additional $30,000 cost separately over its useful life. 
D) expense the $30,000 and depreciate the original cost of $50,000 over its revised estimated total live of 7 years.

Question 4

How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows?

Accepted Answer

A) As operating activities 
B) As investing activities 
C) As financing activities 
D) They are not reported on a statement of cash flows 
A) As operating activities 
B) As investing activities 
C) As financing activities 
D) They are not reported on a statement of cash flows

Question 5

Ramirez Stores purchased a trademark at the beginning of 2013 for $340,000.Economic benefits were expected for 10 years,but the trademark's legal life was 20 years.Also,during 2013,Ramirez incurred research and development costs of $200,000.The book value of the trademarks at December 31,2013,is

Accepted Answer

A) $506,000 
B) $306,000 
C) $323,000 
D) $486,000 
A) $506,000 
B) $306,000 
C) $323,000 
D) $486,000

Question 6

Distinguish between capital and revenue expenditures.

Accepted Answer

Capital expenditures are added to the ac

Question 7

The effect of recording depreciation for the year is a(n)

Accepted Answer

A) decrease in assets and a decrease in net income. 
B) decrease in assets but no change in owners' equity. 
C) increase in assets and an increase in net income. 
D) decrease in net income and no change in assets. 
A) decrease in assets and a decrease in net income. 
B) decrease in assets but no change in owners' equity. 
C) increase in assets and an increase in net income. 
D) decrease in net income and no change in assets.

Question 8

How are research and development costs reported in the financial statements? Why is this treatment required?

Accepted Answer

Research and development costs should be

Question 9

On the balance sheet,a company reports plant assets by subtracting residual value from the original cost of the plant asset.

Accepted Answer

A) True 
 B)False

Question 10

Below are several accounts and balances from the 2013 financial statements for Valcaria,Inc..Prepare the intangible asset section of the company's balance sheet,as well as a partial income statement in the space provided below using the accounts provided.

Accepted Answer

BALANCE SH

Question 11

One reason management may choose the straight-line method of depreciation is because it is easy to compute.

Accepted Answer

A) True 
 B)False

Question 12

The Loss on Sale of Asset indicates the amount by which the asset's sales price is less than its book value.

Accepted Answer

A) True 
 B)False

Question 13

Goodwill can be recorded as an asset when a(n)

Accepted Answer

A) business has above normal profitability compared to other businesses in its industry. 
B) business can determine that it has created customer goodwill and name recognition. 
C) offer is received to purchase the business at a price in excess of the value of the assets. 
D) business is purchased and payment is made in excess of the value of the net assets. 
A) business has above normal profitability compared to other businesses in its industry. 
B) business can determine that it has created customer goodwill and name recognition. 
C) offer is received to purchase the business at a price in excess of the value of the assets. 
D) business is purchased and payment is made in excess of the value of the net assets.

Question 14

Depreciation is a process by which

Accepted Answer

A) replacement funds are accumulated for plant and equipment. 
B) the decline in market value of plant and equipment is determined and recorded. 
C) the cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset. 
D) the difference between current market value and historical cost of plant and equipment. 
A) replacement funds are accumulated for plant and equipment. 
B) the decline in market value of plant and equipment is determined and recorded. 
C) the cost of plant and equipment is allocated to expense over the time periods which benefit from the use of the asset. 
D) the difference between current market value and historical cost of plant and equipment.

Question 15

Select the financial statement on which the user would most likely find the answer to the question given.

Accepted Answer

The answer of Select the financial statement on which the...

Question 16

The three reasons why a company might choose an accelerated depreciation method are __________________________________________________,__________________________________________________,and __________________________________________________.

Accepted Answer

1 To min imize income and taxe

Question 17

How does goodwill arise? How is it accounted for and reported on the financial statements?

Accepted Answer

Goodwill arises when a company purchases

Question 18

In general,FASB standards concerning property,plant,and equipment are similar to the international accounting standards,with two important differences.

Accepted Answer

A) True 
 B)False

Question 19

Please answer the following questions regarding depreciation:
_________________________ is the GAAP depreciation method used most frequently?

Accepted Answer

The answer of Please answer the following questions regarding depreciation:
_________________________...

Question 20

On the balance sheet,the cumulative amount of plant and equipment already expensed is reported in an account called

Accepted Answer

A) Accumulated Amortization 
B) Accumulated Depreciation 
C) Amortization Expense 
D) Depreciation Expense 
A) Accumulated Amortization 
B) Accumulated Depreciation 
C) Amortization Expense 
D) Depreciation Expense

Land is not depreciated because it

Explain the meaning or significance of the following ratios:

How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows?

Ramirez Stores purchased a trademark at the beginning of 2013 for $340,000.Economic benefits were expected for 10 years,but the trademark's legal life was 20 years.Also,during 2013,Ramirez incurred research and development costs of $200,000.The book value of the trademarks at December 31,2013,is

Distinguish between capital and revenue expenditures.

The effect of recording depreciation for the year is a(n)

How are research and development costs reported in the financial statements? Why is this treatment required?

On the balance sheet,a company reports plant assets by subtracting residual value from the original cost of the plant asset.

Below are several accounts and balances from the 2013 financial statements for Valcaria,Inc..Prepare the intangible asset section of the company's balance sheet,as well as a partial income statement in the space provided below using the accounts provided.

One reason management may choose the straight-line method of depreciation is because it is easy to compute.

The Loss on Sale of Asset indicates the amount by which the asset's sales price is less than its book value.

Goodwill can be recorded as an asset when a(n)

Depreciation is a process by which

Select the financial statement on which the user would most likely find the answer to the question given.

The three reasons why a company might choose an accelerated depreciation method are ,,and __.

How does goodwill arise? How is it accounted for and reported on the financial statements?

In general,FASB standards concerning property,plant,and equipment are similar to the international accounting standards,with two important differences.

Please answer the following questions regarding depreciation: _________________________ is the GAAP depreciation method used most frequently?

On the balance sheet,the cumulative amount of plant and equipment already expensed is reported in an account called

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 8: Operating Assets: Property, plant, and Equipment, and Intangibles

Land is not depreciated because it

Explain the meaning or significance of the following ratios:

How are the cash flow effects from the purchase and sale of intangible assets reported on a statement of cash flows?

Ramirez Stores purchased a trademark at the beginning of 2013 for $340,000.Economic benefits were expected for 10 years,but the trademark's legal life was 20 years.Also,during 2013,Ramirez incurred research and development costs of $200,000.The book value of the trademarks at December 31,2013,is

Distinguish between capital and revenue expenditures.

The effect of recording depreciation for the year is a(n)

How are research and development costs reported in the financial statements? Why is this treatment required?

On the balance sheet,a company reports plant assets by subtracting residual value from the original cost of the plant asset.

Below are several accounts and balances from the 2013 financial statements for Valcaria,Inc..Prepare the intangible asset section of the company's balance sheet,as well as a partial income statement in the space provided below using the accounts provided.

One reason management may choose the straight-line method of depreciation is because it is easy to compute.

The Loss on Sale of Asset indicates the amount by which the asset's sales price is less than its book value.

Goodwill can be recorded as an asset when a(n)

Depreciation is a process by which

Select the financial statement on which the user would most likely find the answer to the question given.

The three reasons why a company might choose an accelerated depreciation method are __________________________________________________,__________________________________________________,and __________________________________________________.

How does goodwill arise? How is it accounted for and reported on the financial statements?

In general,FASB standards concerning property,plant,and equipment are similar to the international accounting standards,with two important differences.

Please answer the following questions regarding depreciation: _________________________ is the GAAP depreciation method used most frequently?

On the balance sheet,the cumulative amount of plant and equipment already expensed is reported in an account called

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Current Liabilities, contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

The three reasons why a company might choose an accelerated depreciation method are ,,and __.