Question

1. Which of the following would not be included in the Land​ account?

A.back property taxes paid

B.brokerage commissions connected with the purchase of the land

C.paving costs for a driveway

D.survey fees connected with the purchase of the land

2.Which of the following expenses is most closely associated with tangible

longminus−lived

​assets?

A.depletion

B.interest

C.accumulation

D.depreciation

3.Which of the following statements is true​?

A.Depreciation means that a business sets aside cash to replace assets as they become fully amortized.

B.Depreciation is a process of objective valuation.

C.Accumulated depreciation represents a growing amount of cash to be used to replace the existing asset.

D.Accumulated depreciation is that portion of​ property, plant, and​ equipment's cost that has already been recorded as an expense.

4.At the end of an​ asset's useful​ life, the balance in Accumulated Depreciation​ will:

A.be greater under unitsminus−ofminus−production depreciation than under straightminus−line depreciation

B.be a lesser amount under doubleminus−decliningminus−balance depreciation than under unitsminus−ofminus−production depreciation

C.be a greater amount under straightminus−line depreciation than under doubleminus−decliningminus−balance depreciation

D. be the same amount under all the depreciation methods

5. Lauter Tun Corporation acquired equipment on January​ 1, 2012, for​ $300,000. The equipment had an estimated useful life of 10 years and an estimated salvage value of​ $25,000. On January​ 1, 2015, Lauter Tun Corporation revised the total useful life of the equipment to 8 years and the estimated salvage value to be​ $10,000. Compute depreciation expense for the year ending December​ 31, 2015, if Lauter Tun Corporation uses straightminus−line depreciation.

A.​$38,500

B.$25,938

C.$43,500

D.$41,500

6.A loss is recorded on the sale of​ property, plant, and equipment​ when:

A.a loss on the sale of​ property, plant, and equipment is not allowed according to GAAP

B.the asset is sold for a price greater than the​ asset's book value

C.the​ asset's book value is greater than the amount of cash received from the sale

D.the​ asset's book value is less than the balance in Accumulated Depreciation

7.Equipment is acquired by issuing a note payable for​ $50,000 and a making a down payment of​ $20,000. The statement of cash flows will report​ a:

A.​$20,000 outflow in the operating activities section

B.$70,000 outflow in the investing activities section

C.​$50,000 inflow in the financing activities section

D.​$20,000 outflow in the investing activities section

8.Copyrights are granted for the life of the author​ plus:

A.100 years

B.40 years

C.50 years

D.10 years

9.Bavarian Purity Corporation purchased equipment for​ $32,000. Bavarian Purity also paid​ $400 for freight and insurance while the equipment was in transit. Sales tax amounted to​ $240. Insurance,​ taxes, and maintenance the first year of use cost​ $1,000. How much should Bavarian Purity Corporation capitalize as the cost of the​ equipment?

A.​$32,400

B.​$32,000

C.$32,640

D.​$31,640

10.

Depreciable cost is defined​ as:

A.​asset's cost minus estimated residual value

B.cost minus accumulated depreciation

C.salvage value

D.book value

Answer 1