Quiz
Exam2 - Q6
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Questions in this quiz (20)
1Property, plant, and equipment include both tangible and intangible fixed assets.
- ATrue
- BFalse
2Capitalization is the process of recording an expenditure as an asset.
- ATrue
- BFalse
3When more than one different type of asset is acquired in one purchase transaction, the total purchase price is allocated among the assets in proportion to their fair values.
- ATrue
- BFalse
4Which of the following is not a major characteristic of a fixed asset?
- Aacquired for resale
- Btangible in nature
- Cexpected to be used for more than one year
- Dused in the production and sale of other assets
5The cost of land does not include ________.
- Acosts of removing old buildings
- Bcosts of improvements with limited lives
- Ccosts of grading and clearing the land
- Dlegal fees and closing costs
6Generally, which of the following costs are capitalized for self-constructed assets?
- Amaterials and labor only
- Blabor and overhead only
- Cmaterials and overhead only
- Dmaterials, labor, and overhead
7Adding new offices to an existing office building would qualify as a capital expenditure.
- ATrue
- BFalse
8Depreciation is the systematic allocation of the cost of both tangible and intangible assets to expense over the asset's expected useful lives.
- ATrue
- BFalse
9Net book value is equal to the original cost of an asset minus accumulated depreciation for that asset.
- ATrue
- BFalse
10Which of the following is not a method for determining depreciation expense for a specific asset?
- Anet method
- Bunits-of-output method
- Cdeclining-balance method
- Dstraight-line method
11What type of account is Accumulated Depreciation?
- Acontra-equity
- Bcontra-asset
- Cexpense
- Dasset
12A company recognizes a gain on the income statement whenever it sells a fixed asset for more than the net book value of the asset.
- ATrue
- BFalse
13Companies are required to disclose the amount of accumulated depreciation either for each major class of fixed assets or in total for all fixed assets.
- ATrue
- BFalse
14Goodwill is recognized only when the purchase price of a company is greater than the fair value of the assets of that company.
- ATrue
- BFalse
15Impairment of a long-term operating asset occurs when ________.
- Athe carrying value of the asset is systematically reduced over its useful economic life
- Bthere is a failure to meet the legal obligations or conditions of a loan by which that asset was acquired
- Can asset or part of an asset is removed from the asset portfolio
- Dan asset's total future cash-generating ability falls below its carrying value
16Firms assess assets for impairment ________.
- Aas individual assets only
- Bin asset groups only
- Cas either individual assets or in asset groups
- Das both individual assets and in asset groups
17For which of the following does U.S. GAAP permit recognition of recovery of impairment?
- Apatents held for sale
- Bpatents held for use
- Cgoodwill
- Dnone of these
18U.S. GAAP allows companies to make a qualitative evaluation annually to determine whether it is more likely than not that a reporting unit's goodwill is impaired.
- ATrue
- BFalse
19Average remaining life of a company's long-term operating assets is computed as ________.
- Athe amount of depreciation expense divided by accumulated depreciation
- Bthe amount of accumulated depreciation divided by depreciation expense
- Cthe amount of depreciation expense divided by the balance of ending net fixed assets
- Dthe balance of ending net fixed assets divided by depreciation expense
20Both U.S. GAAP and IFRS requires disclosure of the gross value of goodwill and related accumulated amortization.
- ATrue
- BFalse
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- Description
- 1 Accounting Quiz on Exam2 - Q6, created by Ling Zheng Weng on 11/02/2019.
- Author
- Ling Zheng Weng
- Language
- English
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