Question

1.Which is not a required characteristic for a liability to be recognized?

Nonavoidable

Service potential

Incurred

2.

Which of the following is not a general category of shareholders' equity?

Net income

Contributed capital

Noncontrolling interest

Earned capital

3.

An asset is valued by the price that would be received by selling it in an orderly transaction between market participants on the date of measurement. Which measurement method is being used in this case?

Present value

Reliable value

Historical cost

Fair value

Transfer

4.

A balance sheet account that is usually reported at fair value is

Marketable Securities.

Accounts Payable.

Inventory.

Land.

5.

A balance sheet account that is usually reported at present value is

Inventory.

Accounts Payable.

Land.

Note Payable.

6.

Long-term investments include all of the following except

cash surrender value of life insurance policies.

a building held for rental activity.

bonds payable.

sinking funds.

7.

Property, plant, and equipment section of the balance sheet includes all of the following except

intangible assets.

leasehold improvements.

natural resources.

construction in progress.

8.

What is the term for the systematic allocation of the costs of intangible assets to expense?

Impairment

Amortization

Depletion

Depreciation

9.

Which of the following is not an intangible asset?

Brand name

Deferred tax asset

Franchise

Computer software

Which of the following would typically be recorded as an intangible asset with a finite useful life?

Brand name

Goodwill

Franchises

Trademarks

Which of the following would typically be recorded as an intangible asset with a finite useful life?

Brand name

Goodwill

Franchises

Trademarks

10.

The adjusted historical cost of fixed assets, calculated as historical cost minus depreciation, is called

depreciable cost.

net book value.

amortization.

impairment.

Answer 1

Ans 1 :	Option B i.e. service potential. Service potential is characteristics for recognition of assets and not liability. It is for measure of benefit received.
Ans 2 :	Option A i.e. Net income. Net income is not a part of shareholder's equity, instead income which is retained is part of shareholder' s equity.
Ans 3 :	Option D is correct i.e. Fair value. Fair value is the measurement method in which the price that would be received by selling it in an orderly transaction between market participants on the date of measurement.
Ans 4 :	Option A is correct i.e. Marketable securities. Generally Marketable securities are valued at fair value.
Ans 5 :	Option D is correct i.e. Note payable. Note payable is reported at present value .Its a kind of borrowing agains note payable with interest.
Ans 6 :	Option C is correct. Bonds payable is not a investment instead it’s a liability.
Ans 7 :	Option A is correct i.e. Intangible assets. PPE included tangible assets held for use and not intangible assets in balance sheet.
Ans 8 :	Option B I.e. Amortization. Systematic allocation of cost of intangible assets to expense is called amortization on the other hand for tangible assets its depreciation.
Ans 9 :	Option B is correct i.e. Deferred tax assets. Deferred tax assets is not an intangible assets

Ans 9 : b	Option B is correct i.e. Goodwill is an intangible asset with finite useful life.
Ans 10 :	Option B is correct i.e. Net book value. Gross value of asset less depreciation = Net book value.