1 A company should expense an expenditure if A It is paid for with cash B The benefit of the expenditure is used up over multiple accounting periods C The benefit of the expenditure is used up within the accounting period D If it results in a credit to Accounts Payable 2 Which of the following statements regarding intangible assets is true A Most intangible assets are amortized on a straight line basis each year B Intangible assets are reported at fair market value on the balance sheet C Intangibles Assets balances increase when the company repurchases its stock from the market D Intangible assets are recorded net of accumulated depreciation 3 If a company capitalizes costs that should have been expensed, how is its income statement for the current period impacted A Net income will be lower than it should be B Revenues will be lower than they should be C Expenses will be lower than they should be D Assets will be lower than they should be 4 A company paid sales price of $200,000 to purchase equipment and $10,000 to have the equipment delivered to and installed in the company's production facilities on January 1, 2014 The sale tax for the purchase was $15k and $10k of maintenance expenses were incurred during the first year of operation The estimated residual value of the equipment is $5,000 The equipment is expected to be used a total of 20,000 hours throughout its estimated useful life of five years The company has a December 31, 2014 year end and had used the equipment a total of 6,000 hours during 2014 Using the units of production method, what amount of depreciation expense would the company report for this equipment in the income statement prepared for the year ended December 31, 2014 If a company capitalizes costs that should have been expensed, how is its income statement for the current period impacted A $66,000 B $69,000 C $58,500 D $72,000

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1. A company should expense an expenditure if: A. It is paid for with cash B. The benefit of the expenditure is used up over

A company should expense an expenditure if:

A. It is paid for with cash

B. The benefit of the expenditure is used up over multiple accounting periods

C. The benefit of the expenditure is used up within the accounting period

D. If it results in a credit to Accounts Payable

Which of the following statements regarding intangible assets is true?

A.	Most intangible assets are amortized on a straight-line basis each year.
B.	Intangible assets are reported at fair market value on the balance sheet.
C.	Intangibles Assets balances increase when the company repurchases its stock from the market.
D.	Intangible assets are recorded net of accumulated depreciation.

If a company capitalizes costs that should have been expensed, how is its income statement for the current period impacted? A. Net income will be lower than it should be.
B. Revenues will be lower than they should be.
C. Expenses will be lower than they should be.
D.	Assets will be lower than they should be.

A company paid sales price of $200,000 to purchase equipment and $10,000 to have the equipment delivered to and installed in the company's production facilities on January 1, 2014. The sale tax for the purchase was $15k and $10k of maintenance expenses were incurred during the first year of operation. The estimated residual value of the equipment is $5,000. The equipment is expected to be used a total of 20,000 hours throughout its estimated useful life of five years. The company has a December 31, 2014 year-end and had used the equipment a total of 6,000 hours during 2014. Using the units- of- production method, what amount of depreciation expense would the company report for this equipment in the income statement prepared for the year-ended December 31, 2014?

If a company capitalizes costs that should have been expensed, how is its income statement for the current period impacted? A. $66,000
B. $69,000
C. $58,500
D. $72,000