Quiz
Chapter 9 - Fixed Assets and Intangible Assets - Concept
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Questions in this quiz (27)
1Which of the following is included in the cost of constructing a building?
- Acost of paving the parking lot
- Bcost of removing the demolished building existing on the land when it was purchased
- Cinsurance costs during construction
- Dcost of repairing vandalism damage during construction
2Accumulated Depreciation
- Ais the same as Depreciation Expense
- Bis used to show the amount of cost expiration of intangibles
- Cis a contra asset account
- Dis used to show the amount of cost expiration of natural resources
3Expenditures that add to the utility of fixed assets for more than one accounting period are
- Acapital expenditures
- Brevenue expenditures
- Cutility expenditures
- Dcommitted expenditures
4A capital expenditure results in a debit to
- Aan asset account
- Ban expense account
- Ca liability account
- Da capital account
5In a lease contract, the party who legally owns the asset is the
- Alessor
- Blessee
- Cbanker
- Doperator
6The journal entry for recording payment for the short-term lease of a fixed asset would
- Adebit the fixed asset and credit Cash
- Bdebit Rent Expense and credit Cash
- Cdebit a liability and credit Cash
- Dbe a memo entry only
7Which of the following are criteria for determining whether to record an asset as a fixed asset?
- Amust be tangible and an investment
- Bmust be long lived and used by the company in its normal operations
- Cmust be short lived and tangible
- Dmust be an investment and long lived
8Factors contributing to a decline in the usefulness of a fixed asset may be divided into the following two categories
- Afunctional and residual
- Bsalvage and functional
- Cphysical and functional
- Dresidual and salvage
9A fixed asset's estimated value at the time it is to be retired from service is called
- Abook value
- Bcarrying value
- Cresidual value
- Dmarket value
10All of the following are needed for the calculation of straight-line depreciation except
- Aunits produced
- Bestimated life
- Cresidual value
- Dcost
11The method of determining depreciation that yields successive reductions in the periodic depreciation charge over the estimated life of the asset is the
- Atime-valuation method
- Bunits-of-production method
- Cstraight-line method
- Ddouble-declining-balance method
12When the amount of use of a fixed asset varies from year to year, the method of determining depreciation expense that best matches allocation of cost with revenue is
- Aunits-of-output method
- BMACRS
- Cstraight-line method
- Ddouble-declining-balance method
13The most widely used depreciation method is
- Astraight-line
- Bother
- Cunits-of-output
- Ddouble-declining-balance
14The depreciation method that does not use residual value in calculating the first year's depreciation expense is
- Astraight-line
- Bunits-of-output
- Cdouble-declining-balance
- Dnone of the above
15Residual value is also known as all of the following except
- Anet book value
- Bsalvage value
- Cscrap value
- Dtrade-in value
16The formula for depreciable cost is
- AInitial cost + Residual value
- BInitial cost – Residual value
- CDepreciable cost = Initial cost
- DInitial cost – Accumulated depreciation
17The calculation for annual depreciation using the straight-line depreciation method is
- AInitial cost / Estimated useful life
- BInitial cost × Estimated useful life
- CDepreciable cost × Estimated useful life
- DDepreciable cost / Estimated useful life
18The calculation for annual depreciation using the units-of-output method is
- A(Depreciable cost / Estimated output) × Actual yearly output
- BDepreciable cost / Yearly output
- C(Initial cost / Estimated output) × Actual yearly output
- D(Depreciable cost / Yearly output) × Estimated output
19Which of the following is true?
- AIf using the straight-line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance.
- BRegardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.
- CIf using the double-declining-balance method, the total amount of depreciation expense during the life of the asset will be the highest.
- DIf using the units-of-output method, it is possible to depreciate more than the depreciable cost.
20The accumulated depletion of a natural resource is reported on the
- Abalance sheet as depreciation from the cost of the resource
- Bincome statement as a deduction from revenues
- Cincome statement as an increase in revenue
- Dbalance sheet as a deduction from the cost of the resource
21The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called
- Adeferral
- Bdepreciation
- Camortization
- Ddepletion
22The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is
- Aallocation
- Bdepreciation
- Camortization
- Ddepletion
23Which intangible assets are amortized over their useful life?
- Agoodwill
- Bpatents
- Ctrademarks
- Dall of the above
24The process of transferring the cost of an asset to an expense account is called all of the following except
- Adepletion
- Ballocation
- Camortization
- Ddepreciation
25The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the
- Afixed asset turnover ratio
- Bdays' in assets ratio
- Ccurrent asset turnover ratio
- Dintangible asset ratio
26The higher the fixed asset turnover, the
- Amore efficiently a company is using its fixed assets in generating sales
- Bmore efficiently a company is using its intangible assets in generating sales
- Cless efficiently a company is using its fixed assets in generating sales
- Dmore efficiently a company is using its current assets in generating sales
27When a company replaces a component of property, plant, and equipment, which statement below does not account for one of the steps in the process?
- AThe asset cost of the replaced component is credited.
- BBook value of the replaced component is written off to depreciation expense.
- CThe identifiable direct costs associated with the new component are expensed in the current period.
- DThe identifiable direct costs associated with the new component are capitalized
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- durka Business/Economics Quiz on Chapter 9 - Fixed Assets and Intangible Assets - Concept, created by Mahmoud Hemood on 13/05/2018.
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- Mahmoud Hemood
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- English
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