Quiz
Chapter 9
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Questions in this quiz (32)
1Which of the following is not properly classified as property, plant, and equipment?
- ALand improvement, such as parking lots and fences.
- BBuilding used as a factory.
- CLand used in ordinary business operations.
- DA truck held for resale by an automobile dealership
2A characteristic of a plant asset is that it is
- Anot currently used in the business but held for future use.
- Bused in the operations of a business.
- Cintangible.
- Dheld for sale in the ordinary course of the business.
3Which one of the following items is not considered a part of the cost of a truck purchased for business use?
- AFreight charges.
- BSales tax.
- CTruck license.
- DCost of lettering on side of truck.
- AFreight charges.
4Which of the following would not be included in the Equipment account?
- AElectricity used by the machine.
- BInstallation costs.
- CFreight costs.
- DCost of trial runs.
- AElectricity used by the machine.
5Which of the following assets does not decline in service potential over the course of its useful life?
- AFurnishings.
- BEquipment.
- CLand.
- DFixtures.
- AFurnishings.
6The four subdivisions for plant assets are
- Aland, land improvements, buildings, and equipment.
- Bintangibles, land, buildings, and equipment.
- Cfurnishings and fixtures, land, buildings, and equipment.
- Dproperty, plant, equipment, and land.
- Aland, land improvements, buildings, and equipment.
7The cost of land does not include
- Areal estate brokers' commission.
- Bannual property taxes.
- Caccrued property taxes assumed by the purchaser.
- Dtitle fees.
- Areal estate brokers' commission.
8The Land account would include all of the following costs except
- Athe cost of tearing down a building.
- Bthe cost of building a fence.
- Cdrainage costs.
- Dcommissions paid to real estate agents.
- Athe cost of tearing down a building.
9Land improvements should be depreciated over the useful life of the
- Aland improvements.
- Bland.
- C
buildings on the land. - Dland or land improvements, whichever is longer.
10The balance in the Accumulated Depreciation account represents the
- Acash fund to be used to replace plant assets.
- Bamount charged to expense in the current period.
- Camount charged to expense since the acquisition of the plant asset.
- Damount to be deducted from the cost of the plant asset to arrive at its fair market value.
11The term applied to the periodic expiration of a plant asset's cost is
- Acost expiration.
- Bamortization.
- Cdepletion.
- Ddepreciation.
- Acost expiration.
12Depreciation is the process of allocating the cost of a plant asset over its useful life in a(n)
- Asystematic and rational manner.
- Bequal and equitable manner.
- Cconservative market-based manner.
- Daccelerated and accurate manner.
- Asystematic and rational manner.
13The cost of a long-term asset is expensed
- Aas the asset benefits the company.
- Bin the period in which it is acquired.
- Cwhen it is paid for.
- Din the period in which it is disposed of.
- Aas the asset benefits the company.
14The book value of an asset is equal to the
- Aasset's fair value less its historical cost.
- Breplacement cost of the asset.
- Cblue book value relied on by secondary markets.
- Dasset's cost less accumulated depreciation.
- Aasset's fair value less its historical cost.
15Accountants do not attempt to measure the change in a plant asset's market value during ownership because
- Athe assets are not held for resale.
- Bplant assets cannot be sold.
- Closses would have to be recognized.
- Dit is management's responsibility to determine fair values.
- Athe assets are not held for resale.
16Depreciation is a process of
- Acost accumulation.
- Bcost allocation.
- Casset valuation.
- Dasset devaluation.
- Acost accumulation.
17Recording depreciation each period is necessary in accordance with the
- Aasset valuation principle.
- Bgoing concern principle.
- Chistorical cost principle.
- Dexpense recognition principle.
- Aasset valuation principle.
18In computing depreciation, salvage value is
- Athe fair value of a plant asset on the date of acquisition.
- Bsubtracted from accumulated depreciation to determine the plant asset's depreciable cost.
- Can estimate of a plant asset's value at the end of its useful life.
- Dignored in all the depreciation methods
- Athe fair value of a plant asset on the date of acquisition.
19When estimating the useful life of an asset, accountants do not consider
- Athe cost to replace the asset at the end of its useful life.
- Bthe intended use of the asset.
- Cexpected repairs and maintenance.
- Dvulnerability to obsolescence.
- Athe cost to replace the asset at the end of its useful life.
20All the following are needed for the computation of depreciation except
- Acost.
- Btraining costs of manufacturing personnel.
- Csalvage value.
- Destimated useful life.
21All of the following statements are false regarding depreciation except
- Adepreciation is an asset valuation process.
- B
recognizing depreciation results in the accumulation of cash for asset replacement. - Cdepreciation does not apply to land improvements.
- Ddepreciation does not apply to land.
- Adepreciation is an asset valuation process.
22All of the following statements about the useful life factor associated with depreciation are true except
- Auseful life is also called expected trade-in value.
- Buseful life is an estimate of productive life.
- Cuseful life is also called service life.
- Dpast experience with similar assets is helpful in establishing useful life.
23Expenditures that add to the utility of plant assets for more than one accounting period are
- Arevenue expenditures.
- Bcurrent expenditures.
- Ccapital expenditures.
- Dcommitted expenditures.
- Arevenue expenditures.
24An expenditure for which of the following items would be considered a revenue expenditure?
- APlant asset.
- BAddition.
- CImprovements.
- DOrdinary repair.
- APlant asset.
25Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally
- Adebited to the Accumulated Depreciation account.
- Bcapitalized as a part of the cost of the asset.
- Cnot recorded until they become material in amount.
- Dexpensed when incurred.
26Which of the following is not true of ordinary repairs?
- AThey primarily benefit the current accounting period.
- BThey can be referred to as revenue expenditures
- CThey maintain the expected productive life of the asset.
- DThey increase the productive capacity of the asset.
- AThey primarily benefit the current accounting period.
27Additions and improvements
- Anormally involve immaterial expenditures.
- Btypically only benefit the current accounting period.
- Coccur frequently during the ownership of a plant asset.
- Dincrease the company's investment in productive facilities.
- Anormally involve immaterial expenditures.
28A gain or loss on disposal of a plant asset is determined by comparing the
- Abook value of the asset with the asset's original cost.
- Boriginal cost of the asset with the proceeds received from its sale.
- Cbook value of the asset with the proceeds received from its sale.
- Dreplacement cost of the asset with the asset's original cost
- Abook value of the asset with the asset's original cost.
29When an asset is sold, a gain occurs when the
- Asale price exceeds the original cost of the asset sold.
- Bbook value exceeds the sale price of the asset sold.
- Csale price exceeds the depreciable cost of the asset sold.
- Dsale price exceeds the book value of the asset sold.
- Asale price exceeds the original cost of the asset sold.
30The book value of a plant asset is the difference between the
- Acost of the asset and the accumulated depreciation to date.
- Breplacement cost of the asset and its historical cost.
- Ccost of the asset and the amount of depreciation expense for the year.
- Dproceeds received from the sale of the asset and its original cost.
- Acost of the asset and the accumulated depreciation to date.
31If disposal of a plant asset occurs during the year, depreciation is
- Arecorded for the whole year.
- Brecorded for the fraction of the year to the date of the disposal.
- Cnot recorded if the asset is scrapped.
- Dnot recorded for the year.
32If a plant asset is retired and is fully depreciated
- Ano gain or loss on disposal will be recorded.
- Bphantom depreciation must be taken as though the asset were still on the books.
- Ca loss on disposal will be recorded.
- Da gain on disposal will be recorded.
- Ano gain or loss on disposal will be recorded.
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- Quiz on Chapter 9, created by robertse10 on 06/11/2014.
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- robertse10
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