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ACCT125 Quiz 2 of 3

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Question 1 1 points Save;Salvage value has a similar meaning as;residual value.;scrap value.;book value.;both residual value and scrap value.;Question 2 1 points Save;Which of the following is NOT characteristic of the accumulated depreciation account?;Accumulated depreciation represents cash reserved for asset replacement.;Accumulated depreciation is a contra-asset account.;Accumulated depreciation may be disclosed in the notes to the financial statements.;All of these are characteristic of the accumulated depreciation account.;Question 3 1 points Save;A current asset account must be increased for revenue expenditures since they only benefit the current period.;True;False;Question 4 1 points Save;A gain is recorded on the sale of fixed assets when;the asset is sold for a price less than its book value.;the asset?s book value is less than the cash received.;accumulated depreciation is less than the cash received.;None of the above.;Question 5 1 points Save;A capital expenditure would appear on the;income statement under operating expenses.;balance sheet under fixed assets.;balance sheet under current assets.;income statement under other expenses.;Question 6 1 points Save;Recording depreciation;decreases net income and cash flows.;decreases net income and has no effect on cash flows.;decreases net income, assets, and cash flows.;decreases net income and has no effect on assets and cash flows.;Question 7 1 points Save;A fixed asset with a cost of $30,000 and accumulated depreciation of $25,000 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?;$2,500 loss;$1,500 loss;$2,500 gain;$1,500 gain;Question 8 1 points Save;Long-lived assets that are intangible in nature, used in the operations of the business, and not held for sale in the ordinary course of business are called fixed assets.;True;False;Question 9 1 points Save;Other descriptive titles for fixed assets would include;plant assets.;property, plant, and equipment.;other long-term assets;both plant assets and property, plant, and equipment.;Question 10 1 points Save;On September 1, a machine with a useful life of 8 years and a residual value of $3,000 was purchased for $47,000. What is depreciation expense in the year of purchase under straight-line depreciation assuming a December 31 year-end?;$3,917;$3,667;$1,958;$1,833;Question 11 1 points Save;The cost of a patent should be amortized;over 20 years.;over its economic life.;over 20 years or its economic life, whichever is shorter.;only if an impairment occurs.;Question 12 1 points Save;Accelerated depreciation is primarily used for;the financial statements of large companies.;the financial statements of small companies.;income tax purposes.;both financial reporting and income taxes by most companies.;Question 13 1 points Save;Goodwill is;amortized similar to other intangibles.;only written down if an impairment in value occurs.;charged to expense immediately.;amortized over 40 years or its economic life, whichever is shorter.;Question 14 1 points Save;If a revenue expenditure is treated as a capital expenditure, then;expenses are overstated and owners' equity is understated.;expenses are overstated and assets are overstated.;expenses are understated and owners' equity is overstated.;net income is overstated and owners' equity is understated.;Question 15 1 points Save;The exclusive right to use a certain name or symbol is called a;franchise.;patent.;trademark.;copyright.;Question 16 1 points Save;A fully depreciated asset must be;removed from the books.;kept on the books until sold or discarded.;disclosed only in the notes to the financial statements.;recognized on the income statement as a loss.;Question 17 1 points Save;Which of the following is NOT a fixed asset?;Equipment;Buildings;Land held for investment;All of these are fixed assets.

 

Paper#75403 | Written in 18-Jul-2015

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