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14_Accounting MCQs




Question;A lump-sum purchase or;basket purchase involves paying a single price for several assets as a group.;True or False;The;double-declining-balance method is an accelerated method of depreciation.;True or False;The gain or loss on the;sale of a plant asset is determined by comparing;sale value and original cost.;sale value and book value.;sale value and residual value.;book value and residual value.;A company purchased a;computer on July 1, 2015 for $50,000. Estimated useful life of the;computer was 5 years and it has no residual value. Which of the following;methods should be used to best match its expense against the revenue it;produces?;the straight-line method;the first-in, first-out method;the units-of-production method;the double-declining-balance method;When a plant asset is sold for a;price lower than its book value, there will be a gain.;True or False;Which of the following accounting;principles requires businesses to record depreciation?;the matching principle;the going concern principle;the cost principle;the revenue recognition principle;Which of the following is included;in the cost of a plant asset?;amounts paid to make the asset ready;for its intended use;replacement of damaged parts of the;asset;regular repair and maintenance cost;wages of workers who work with the;asset;Iverycoast Inc. purchased a van on;January 1, 2015, for $800,000. Estimated life of the van was 5 years, and;its estimated residual value was $90,000. Iverycoast uses the;straight-line method of depreciation. At the beginning of 2017, the;company revised the total estimated life of the asset from 5 years to 4;years. The estimated residual value remained the same as estimated;earlier. Calculate the depreciation expense for the year 2017.;$250,000;$220,000;$213,000;$145,000;Which of the following is true of;asset turnover ratio?;It measures how efficiently a business uses its sales to finance;the assets.;It measures;how the ending inventory helps in increasing the value of assets.;It measures how efficiently a business uses its net profit to;finance the assets.;It measures how efficiently a business uses its average total;assets to generate sales.;Which of the following is an expense resulting from decline in;the utility of a natural resource?;depletion;amortization;depreciation;obsolescence;Fred owns a delivery truck. Which of the following costs;associated with the truck, will be treated as a revenue expenditure?;modification for new use;addition to;storage capacity;major engine overhaul;oil change;and lubrication;If a company uses the contra account, Accumulated Amortization;this account will typically be shown on the balance sheet.;True or False;A company purchased a used machine;for $10,000. The machine required installation costs of $1,000 and;insurance while in transit of $500. At which of the following amounts;would the machine be recorded?;$10,500;$11,000;$10,000;$11,500;Steel Rolling Company purchased a;mine on January 1, 2015, for $500,000 and it is estimated to contain 30,000;tons of iron ore. There is no residual value. The company has;extracted 2,500 tons of ore in 2015 and 3,800 tons of ore in 2016. What;is depletion expense for 2016? (Do not round your intermediate calculations).;$42,667;$63,667;$63,333;$33,333


Paper#37310 | Written in 18-Jul-2015

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