Question 1

Intangible assets are used in operations but

Accepted Answer

A)  cannot be specifically identified.
B)  cannot be sold.
C)  lack physical substance.
D)  cannot be long-lived.E) A) and B)
F) All of the above

Question 2

Long-lived assets that are intangible in nature,used in the operations of the business,and not held for sale in the ordinary course of business are called fixed assets.

Accepted Answer

A) True 
 B)False

Question 3

A company acquired mineral rights for $7,500,000.The mineral deposit is estimated at 600,000 tons and during the year 100,000 tons were extracted and sold.

Accepted Answer

The answer of A company acquired mineral rights for $7,500,000.The...

Question 4

Depreciable cost equals

Accepted Answer

A)  cost less accumulated depreciation.
B)  book value less residual value.
C)  cost less residual value.
D)  market value less residual value.E) A) and B)
F) A) and C)

Question 5

Expenditures for research and development are generally recorded as

Accepted Answer

A)  current operating expenses.
B)  assets and amortized over their estimated useful life.
C)  assets and amortized over 40 years.
D)  current assets.E) B) and C)
F) C) and D)

Question 6

A pressurized spray painter was purchased on April 1 of the fiscal year for $3,900.It has a useful life of 4 years and a residual value of $300.Determine depreciation expense for the first two years,assuming a fiscal year end of December 31 and using (a)the straight-line method and (b)the double-declining-balance method.

Accepted Answer

The answer of A pressurized spray painter was purchased on...

Question 7

The removal of an old building to make the land ready for its intended use is charged to

Accepted Answer

A)  land.
B)  land improvements.
C)  buildings.
D)  operating expenses.E) B) and C)
F) A) and D)

Question 8

If a capital expenditure is treated as a revenue expenditure,then

Accepted Answer

A)  expenses are overstated and owners' equity is understated.
B)  expenses are overstated and assets are overstated.
C)  expenses are understated and owners' equity is overstated.
D)  net income is overstated and owners' equity is understated.E) All of the above
F) A) and B)

Question 9

If a revenue expenditure is treated as a capital expenditure,then

Accepted Answer

A)  expenses are overstated and owners' equity is understated.
B)  expenses are overstated and assets are overstated.
C)  expenses are understated and owners' equity is overstated.
D)  net income is overstated and owners' equity is understated.E) A) and D)
F) B) and C)

Question 10

Which of the following is NOT an intangible asset?

Accepted Answer

A)  Goodwill
B)  Trademark
C)  Copyrights
D)  Long-term receivableE) None of the above
F) A) and B)

Question 11

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Accepted Answer

A)  Straight-line
B)  MACRS
C)  Double-declining-balance
D)  All of theseE) None of the above
F) All of the above

Question 12

Which of the following 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 factoryE) B) and D)
F) A) and B)

Question 13

Recording depreciation

Accepted Answer

A)  decreases net income and cash flows.
B)  decreases net income and has no effect on cash flows.
C)  decreases net income,assets,and cash flows.
D)  decreases net income and has no effect on assets and cash flows.E) B) and D)
F) A) and C)

Question 14

For each of the following items indicate whether the transactions listed below increased (+),decreased (-)or had no effect (o)by inserting the appropriate symbol.

Accepted Answer

The answer of For each of the following items indicate...

Question 15

The Accumulated Depreciation account is deducted from the cost of fixed assets on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 16

Other descriptive titles for fixed assets would include

Accepted Answer

A)  plant assets.
B)  property,plant,and equipment.
C)  other long-term assets
D)  both plant assets and property,plant,and equipment.E) A) and B)
F) A) and C)

Question 17

To measure depreciation,all of the following must be known EXCEPT

Accepted Answer

A)  market value.
B)  residual value.
C)  historical cost.
D)  estimated life.E) None of the above
F) A) and D)

Question 18

A patent was purchased for $670,000 with a legal life of 20 years.Management estimates that the patent has an 12-year economic life.The entry to record amortization would include

Accepted Answer

A)  an increase in amortization expense for $33,500.
B)  an increase in research and development expense for $670,000.
C)  a decrease in patent for $55,833.
D)  an increase in accumulated amortization for $670,000.E) A) and D)
F) None of the above

Question 19

When selling a piece of equipment for cash,a loss will result when the proceeds of the sale are greater than the book value of the asset.

Accepted Answer

A) True 
 B)False

Question 20

A company sold a delivery truck for $18,000 cash.The truck cost $47,500 and had accumulated depreciation of $36,000 as of the date of sale.The entry to record the sale would include

Accepted Answer

A)  an increase in accumulated depreciation for $36,000.
B)  a decrease in delivery truck for $11,500.
C)  a loss for $6,500.
D)  a gain for $6,500.E) A) and D)
F) A) and C)

Exam 7: Fixed Assets and Intangible Assets

Long-lived assets that are intangible in nature,used in the operations of the business,and not held for sale in the ordinary course of business are called fixed assets.

Correct Answer
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Depreciable cost equals

Correct Answer
verified

Intangible assets are used in operations but

Correct Answer
verified

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Correct Answer
verified

The Accumulated Depreciation account is deducted from the cost of fixed assets on the balance sheet.

Correct Answer
verified

Other descriptive titles for fixed assets would include

Correct Answer
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Correct Answer
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A company acquired mineral rights for $7,500,000.The mineral deposit is estimated at 600,000 tons and during the year 100,000 tons were extracted and sold.

Correct Answer
verified

The removal of an old building to make the land ready for its intended use is charged to

Correct Answer
verified

To measure depreciation,all of the following must be known EXCEPT

Correct Answer
verified

A patent was purchased for $670,000 with a legal life of 20 years.Management estimates that the patent has an 12-year economic life.The entry to record amortization would include

Correct Answer
verified

If a capital expenditure is treated as a revenue expenditure,then

Correct Answer
verified

For each of the following items indicate whether the transactions listed below increased (+),decreased (-)or had no effect (o)by inserting the appropriate symbol.

Correct Answer
verified

If a revenue expenditure is treated as a capital expenditure,then

Correct Answer
verified

Recording depreciation

Correct Answer
verified

When selling a piece of equipment for cash,a loss will result when the proceeds of the sale are greater than the book value of the asset.

Correct Answer
verified

Which of the following is NOT an intangible asset?

Correct Answer
verified

Expenditures for research and development are generally recorded as

Correct Answer
verified

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

Correct Answer
verified

A company sold a delivery truck for $18,000 cash.The truck cost $47,500 and had accumulated depreciation of $36,000 as of the date of sale.The entry to record the sale would include

Correct Answer
verified

Exam 7: Fixed Assets and Intangible Assets

Long-lived assets that are intangible in nature,used in the operations of the business,and not held for sale in the ordinary course of business are called fixed assets.

Correct AnswerverifiedShow Answer

Depreciable cost equals

Correct AnswerverifiedShow Answer

Intangible assets are used in operations but

Correct AnswerverifiedShow Answer

Which method of depreciation considers residual value in computing the normal periodic depreciation?

Correct AnswerverifiedShow Answer

The Accumulated Depreciation account is deducted from the cost of fixed assets on the balance sheet.

Correct AnswerverifiedShow Answer

Other descriptive titles for fixed assets would include

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A company acquired mineral rights for $7,500,000.The mineral deposit is estimated at 600,000 tons and during the year 100,000 tons were extracted and sold.

Correct AnswerverifiedShow Answer

The removal of an old building to make the land ready for its intended use is charged to

Correct AnswerverifiedShow Answer

To measure depreciation,all of the following must be known EXCEPT

Correct AnswerverifiedShow Answer

A patent was purchased for $670,000 with a legal life of 20 years.Management estimates that the patent has an 12-year economic life.The entry to record amortization would include

Correct AnswerverifiedShow Answer

If a capital expenditure is treated as a revenue expenditure,then

Correct AnswerverifiedShow Answer

For each of the following items indicate whether the transactions listed below increased (+),decreased (-)or had no effect (o)by inserting the appropriate symbol.

Correct AnswerverifiedShow Answer

If a revenue expenditure is treated as a capital expenditure,then

Correct AnswerverifiedShow Answer

Recording depreciation

Correct AnswerverifiedShow Answer

When selling a piece of equipment for cash,a loss will result when the proceeds of the sale are greater than the book value of the asset.

Correct AnswerverifiedShow Answer

Which of the following is NOT an intangible asset?

Correct AnswerverifiedShow Answer

Expenditures for research and development are generally recorded as

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A company sold a delivery truck for $18,000 cash.The truck cost $47,500 and had accumulated depreciation of $36,000 as of the date of sale.The entry to record the sale would include

Correct AnswerverifiedShow Answer

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