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Question 1 of 20 |
5.0 Points |
Mount Company purchased a machine at an invoice cost of $21,000 subject to terms of 3/10, n/30. The discount was taken. Additional costs were installation, $1200; insurance on the machine after it was in operation, $370. The total cost to be added to the machinery account is:
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A. $20,740. |
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B. $21,940. |
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C. $21,000. |
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D. $21,570. |
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D. None of these are correct. |
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Question 3 of 20 |
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An example of an intangible asset is:
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A. assembly cost. |
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B. a patent. |
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C. a building. |
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D. land. |
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Question 4 of 20 |
Which of the following is a non-depreciable asset?
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A. Computer |
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B. Desk chairs |
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C. Building |
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D. Land |
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Question 5 of 20 |
The cost of an asset less its accumulated depreciation is called:
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A. residual value. |
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B. book value. |
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C. salvage value. |
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D. market value. |
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Question 6 of 20 |
Revenue expenditures include:
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A. periodic normal maintenance costs. |
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B. additions to existing plant assets. |
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C. initial costs of acquiring plant assets. |
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D. All of these answers are correct. |
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Question 7 of 20 |
The depreciation method which charges more expense in earlier years than in later years is the:
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A. double declining-balance method. |
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B. units-of-production method. |
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C. straight-line method. |
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D. All of the above. |
| Question 8 of 205.0 Points
The amount to include in the entry to record the cost of a property, plant, and equipment asset would include: [removed]A. acquisition cost. [removed]B. installation. [removed]C. freight. [removed]D. All of these answers are correct. |
| Question 9 of 205.0 Points
Straight-line depreciation is used in the first year when double-declining-balance should be used. This error would cause: [removed]A. the period’s net income to be understated. [removed]B. the period end assets to be understated. [removed]C. the period’s net income to be overstated. [removed]D. None of these are correct. |
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Question 10 of 20 |
Lacy purchased equipment for $77,000 on January 1. Its residual value is $5,000 with a useful life of 9 years. The amount of depreciation expense in the first year under the straight-line method is:
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A. $8,000. |
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B. $15,840. |
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C. $16,940. |
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D. $8,556. |
| Question 11 of 205.0 Points
Jason Moore purchased computer equipment for $2,800 on January 1, 2012. It has a residual value of $400 with a useful life of 4 years. After the appropriate adjusting entries have been made, the balance in Accumulated Depreciation account for this asset on January 1, 2014, under the straight-line method, should be: [removed]A. $1,400. [removed]B. $1,200. [removed]C. $700. [removed]D. $600. |
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Question 12 of 20 |
The cost of equipment is expensed:
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A. in the period it is sold. |
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B. over the periods that benefit the company. |
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C. at the time it is paid. |
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D. in the period it is purchased. |
| Question 13 of 205.0 Points
Which of the following is an example of a land improvement? [removed]A. Driveway [removed]B. Shrubbery [removed]C. Fences [removed]D. All of these answers are correct. |
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Question 14 of 20 |
The entry to record the disposal of a laptop computer with a cost of $2,500 and an accumulated depreciation of $1,500 would be:
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A. debit Depreciation Expense, $2,500; credit Equipment $2,500. |
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B. debit Cash $2,500; credit Equipment $2,500. |
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C. debit Accumulated Depreciation $1,500; debit Loss on Disposal of an Asset $1,000; credit Equipment $2,500. |
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D. debit Equipment $2,500; credit Accumulated Depreciation $2,500. |
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Question 15 of 20 |
When selling a plant asset, the gain was not recorded, but pocketed. This error would cause:
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A. the period’s net income to be overstated. |
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B. the period end assets to be overstated. |
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C. the period’s net income to be understated. |
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Question 16 of 20 |
The entry to record the purchase of a machine on account that costs $20,000, set-up fees, $1,000, and freight, $500, would be:
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A. debit Machinery $20,000, debit Expenses $1,500; and credit Accounts Payable $21,500. |
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B. debit Machinery $20,000; credit Accounts Payable $20,000. |
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C. debit Machinery $20,500; credit Accounts Payable $20,500. |
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D. debit Machinery $21,500; credit Accounts Payable $21,500. |
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Question 17 of 20 |
Which depreciation method does not deduct residual value when computing depreciation expense?
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A. Straight-line |
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B. Double-declining-balance |
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C. Units-of-production |
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D. Both A and B are correct. |
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Question 18 of 20 |
A company purchases a patent for $50,000. The patent will be amortized over 5 years. The entry to record the amortization in the first year is:
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A. debit Amortization of Patents $50,000; credit Patents $50,000. |
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B. debit Patents $50,000; credit Cash $50,000. |
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C. debit Patents $10,000; credit Amortization of Patents $10,000. |
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D. debit Amortization of Patents $10,000; credit Patents $10,000. |
| Question 19 of 205.0 Points
A loss on the sale of an asset would occur when: [removed]A. the cash received is greater than the book value of the asset. [removed]B. the cash received is less than the book value of the asset. [removed]C. the cash received is equal to the book value of the asset. [removed]D. None of these answers are correct. |
| Question 20 of 205.0 Points
Chocolate Supreme purchased new baking equipment for $15,000 subject to terms 4/10, n/45. The discount was taken. Additional costs included sales tax $900 and installation $300. The total cost to be added to the machinery account is: [removed]A. $15,000. [removed]B. $15,900. [removed]C. $15,300. [removed]D. $15,600. |
