Assets
 
  1. Question: Erin Danielle Company purchase equipment and incurred the following costs.
    Cash price$24,000
    Sales taxes$1,200
    Insurance during transit$200
    Installation and testing$400
    Total Costs$25,800
    What amount should be recorded as the cost of the equipment?

    A
    $24,000

    B
    $25,200

    C
    $25,400

    D
    $25,800

    Note: Not available
    1. Report
  2. Question: Depreciation is a process of:

    A
    valuation.

    B
    cost allocation.

    C
    cash accumulation.

    D
    appraisal

    Note: Not available
    1. Report
  3. Question: Micah Barlett Company purchase equipment on Janurary 1,2001, at a total invoice cost $400,000. The equipment has an estimated salvage value of $10,000 and an estimated useful life of 5 years. The amount of accumulated depreciation at December 31, 2002, if the straight line method of depreciation is used is:

    A
    $80,000

    B
    $160,000

    C
    $78,000

    D
    $156,000

    Note: Not available
    1. Report
  4. Question: Ann Torbert purchase a truck for $11,000 on January 1, 2001. The truck will have an estimated salvage value of $1,000 at the end of 5 years. Using the units-of-activity method, the balance in accumulated depreciation at December 31,2002, can be computed by the following formula:

    A
    ($11,000 / Total estimated activity) x Units of activity for 2002

    B
    ($10,000 /Total estimated activity) x Units of activity for 2002

    C
    ($11,000 / Total estimated activity) x Units of activity for 2001 and 2002

    D
    ($10,000 / Total estimated activity) x Units of activity for 2001 and 2002

    Note: Not available
    1. Report
  5. Question: When there is a change in estimated depreciation:

    A
    previous depreciation should be corrected.

    B
    current and future year's depreciation should be revised.

    C
    only future year's depreciation should be revised.

    D
    None of the above.

    Note: Not available
    1. Report
  6. Question: Schopenhauer Company exchanged an old machine, with a book value of $39,000 and a fair market value of $35,000 and paid $10,000 cash for a similar new machine. At what amount should be machine acquired in the exchange be recorded on Schopenhauer's books?

    A
    $45,000

    B
    $46,000

    C
    $49,000

    D
    $50,000

    Note: Not available
    1. Report
  7. Question: In exchange of similar assets:

    A
    neither gains nor losses are recognized immediately.

    B
    gains but not losses, are recognized immediately.

    C
    losses, but not gains, are recognized immediately.

    D
    both gains and losses are recognized immediately.

    Note: Not available
    1. Report
  8. Question: Maggie Sharrer Company expects to extract 20 million tons of coal from a mine that cost $12 million. If no salvage value is expected and 2 million tons are mined and sold in the first year, the entry to record depletion will include a:

    A
    debit to Accumulated Depletion of $2,000,000.

    B
    credit to Depletion Expense of $1,200,000.

    C
    debit to Depletion Expense of $1,200,000

    D
    credit to Accumulated Depletion of $2,000,000

    Note: Not available
    1. Report
  9. Question: Martha Beyerlein Company incurred $150,000 of research and development costs in its laboratory to develop a patent granted on January 2, 2002. On July 31,2002, Beyerlein paid $35,000 for legal fees in a successful defense of the patent. The total debited to patents through July 31,2002, should be:

    A
    $150,000

    B
    $35,000

    C
    $185,000

    D
    some other amount.

    Note: Not available
    1. Report
  10. Question: Indicate which of the following statements is true.

    A
    Since intangible assets lack physical substance, they need be disclosed only in the notes to the financial statements.

    B
    Goodwill should be reported as a contra-account in the owner's equity section.

    C
    Totals of major classes of assets can be shown in the balance sheet, with asset details disclosed in the notes to the financial statements.

    D
    Intangible assets are typically combined with plant assets and natural resources and shown in the property, plant and equipment section.

    Note: Not available
    1. Report
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