1. A characteristic of a plant asset is that it_______. (Points : 1)

is used in the production of income for a business is available for resale to customers in the ordinary course of business lacks physical form both a and b are correct

Question 2.2. The term applied to the periodic transfer of a plant assets cost to expense is_______. (Points : 1)

amortization depreciation depletion capitalization

Question 3.3. Which of the following accounting methods is the method used to compute depletion? (Points : 1)

Straight-line Declining-balance Units-of-production capitalization

Question 4.4. Which of the following items is included in the journal entry if a company sells equipment at a price equal to its book value? (Points : 1)

A debit to Loss on sale of equipment A credit to Equipment for its original cost A credit to Accumulated depreciation A debit to Equipment for its book value

Question 5.5. Accumulated depreciation_______. (Points : 1)

is used to show the cost expiration of plant assets is an expense account is used to show the cost expiration of natural assets is used to show the cost expiration of intangible assets

Question 6.6. Accumulated depreciation_______. (Points : 1)

is a contra liability account is an expense account is a contra asset account is a contra equity account

Question 7.7. The double-declining-balance method will provide the greatest tax advantage during the first year of an assets life because it yields the ________ compared to the use of other depreciation methods. (Points : 1)

highest net income lowest net income highest gross profit lowest operating expenses

Question 8.8. The transfer to expense resulting from a decline in the utility of an intangible asset is termed_______. (Points : 1)

depreciation amortization depletion application

Question 9.9. Primm Industrial Contractors purchased a new truck on January 1^st for $35,000. The truck is expected to have a useful life of five years with a salvage value of $4,500. It is estimated that the truck will be able to operate for 200,000 miles. In year one, Primm Industrial Contractors put 46,000 miles on the truck. What amount should be recorded in year one for depreciation expense if the units-of-production method is used? (Points : 1)

$6,100 $7,000 $7,015 $8,050

Question 10.10. A company purchased a used machine for $80,000. The machine required installation costs of $8,000 and insurance while in transit of $500. At which of the following amounts would the equipment be recorded? (Points : 1)

$80,500 $88,500 $88,000 $80,000

Question 11.11. Which of the following would be expensed rather than capitalized? (Points : 1)

Oil change and lubrication Major engine overhaul Modification for new use Addition to storage capacity

Question 12.12. Bibb Corporation purchased a patent for $20,000 on January 1^st, 20X3. The patent allows Bibb Corporation to sell a certain type of cell phone technology for 20 years. However, Bibb Corporation believes the patent will benefit the company for only 4 years as new technologies are rapidly replacing existing ones. The patent will be reported as ________ at the end of 20X5. (Points : 1)

$17,000 $20,000 $15,000 $5,000

Question 13.13. Which of the following is the expected cash value of an asset at the end of its useful life? (Points : 1)

Book value Residual value Carrying value Market value

Question 14.14. Which of the following items should NOT be depreciated because it doesn't wear out? (Points : 1)

Natural resources Land Tangible property, plant, and equipment other than land Intangible property

Question 15.15. Under international financial reporting standards, internally generated intangible assets are ________. (Points : 1)

treated the same as intangible assets that were purchased treated the same as property, plant, and equipment under accounting standards for private enterprises only recorded if they are not separately identifiable capitalized and then amortized if they will provide future benefit, and expensed if they wont provide a future benefit