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Acquisition of an asset are capitalized

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Question 1 (10 points);Costs incurred subsequent to the acquisition of an asset are capitalized if they provide future benefits.;a. True;b. False;Question 2 (10 points);Improvements are often referred to as betterments and involve the substitution of a better asset for the one currently used.;a. True;b. False;Question 3 (10 points);Changes in estimates are handled prospectively by dividing the asset?s book value less any salvage value by the remaining estimated life.;a. True;b. False;Question 4 (10 points);An impairment loss is the amount by which the carrying amount of the asset exceeds the sum of the expected future net cash flows from the use of that asset.;a. True;b. False;Question 5 (10 points);The cost of acquiring a customer list from another company is recorded as an intangible asset.;a. True;b. False;Question 6 (10 points);True no-par stock should be carried in the accounts at issue price without any additional paid-in capital reported.;a. True;b. False;Question 7 (10 points);The cost of purchased patents should be amortized over the remaining legal life of the patent.;a. True;b. False;Question 8 (10 points);Stock splits and large stock dividends have the same effect on a company?s retained earnings and total stockholders? equity.;a. True;b. False;Question 9 (10 points);Companies recognize a gain or loss when stockholders exercise convertible preferred stock.;a. True;b. Fasle;Question 10 (10 points);If a stock dividend occurs after year-end, but before issuing the financial statements, a company must restate the weighted-average number of shares outstanding for the year.;a. True;b. False;Question 11 (10 points);A controlling interest occurs when one corporation acquires a voting interest of more than 50 percent in another corporation.;a. True;b. False;Question 12 (10 points);Trading securities and available-for-sale securities are classified as current or noncurrent assets depending on the circumstances.;a. True;b. False;Question 13 (10 points);A company reduces a deferred tax asset by a valuation allowance if it is probable that it will not realize some portion of the deferred tax asset.;a. True;b. Fasle;Question 14 (10 points);A company should add a decrease in a deferred tax liability to income tax payable in computing income tax expense.;a. True;b. False;Question 15 (10 points);A pension plan is contributory when the employer makes payments to a funding agency.;a. True;b. Fasle;Question 16 (10 points);Qualified pension plans permit deductibility of the employer?s contributions to the pension fund.;a. True;b. False;Question 17 (10 points);A capitalized leased asset is always depreciated over the term of the lease by the lessee.;a. True;b. False;Question 18 (10 points);A lessee records interest expense in both a capital lease and an operating lease.;a. True;b. Fasle;Question 19 (10 points);When a company changes an accounting principle, it should report the change by reporting the cumulative effect of the change in the current year?s income statement.;a. True;b. False;Question 20 (10 points);One of the disclosure requirements for a change in accounting principle is to show the cumulative effect of the change on retained earnings as of the beginning of the earliest period presented.;a. True;b. False

 

Paper#26606 | Written in 18-Jul-2015

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