Question

the expense regonition principle (matching)priciple is used to determine how much the of the cost of goods aviable for sale is deducted from the sales and how much is carried farward as inventory (true/false)

net realizable value for damaged or obsolete goods is sales price less the cost of making a sales(t/f)

the process of allocating the cost of a plant asset to expense in the accounting periods benefiting from its use is called depletion

salvage value is an esimate of an assets value at the end of its benefit period (t/f)

when plant assets are purchased as a group in a single transaction for a lump-sum price, the cost of the purchase is allocated among the different types of assets acquired based on their relative market values(t/f)

obsolescence refers to the insufficient capacity of a company's plant assets to meet the comoany's growing productive demands (t/f)

Answer 1

Ans.1

True

The expense regonition principle (matching)principle is used to determine how much the of the cost of goods aviable for sale is deducted from the sales and how much is carried farward as inventory and matched against future sales.

Ans.2

True

Net realizable value for damaged or obsolete goods is sales price less the cost of making a sales.

Ans.3

False

The process of allocating the cost of a plant asset to expense in the accounting periods benefiting from its use is called depreciation.

Ans.4

True

Salvage value-an estimate of the asset's value at the end of its benefit period (also called residual value or scrap value).

Ans.5

True

A lump-sum purchase is the purchase of plant assets as a group in a single transaction for a lump-sum price. Individual asset cost is determined by allocating the cost of the purchase among the different types of assets acquired based on their relative market values.

Ans.6

False

Obsolescence refers to the condition of a plant asset that is no longer useful in producing goods or services with a competitive advantage because of new inventions and improvements.