1/ AASB 116 requires the capitalisation of inspection costs associated with an asset when:

Select one:

a.

it is probable that benefits will flow to the entity

5/The accounting standard that specifically deals with property, plant and equipment is:

Select one:

a.

AASB 138

b.

AASB 132

c.

AASB 101

d.

AASB 116

b.

all responses

c.

future economic benefits associated with the inspection will flow to the entity

d.

the economic benefits can be measured reliably

2/ Which of the following costs are capitalized for self-constructed assets:

Select one:

a.

Materials, labour, and overhead

b.

Labour and overhead only

c.

Materials and labour only

d.

Materials and overhead only

3/ Which statement concerning depreciation is correct?

Select one:

a.

Land is depreciated

b.

None of the statements is correct

c.

Assets that have increased in value should still be depreciated

d.

Charging depreciation provides cash for asset replacement

4/ Myers Company acquired machinery on January 1, 2010 which it depreciated under the straight-line method with an estimated life of fifteen years and no salvage value. On January 1, 2015, Myers estimated that the remaining life of this machinery was six years with no salvage value. How should this change be accounted for by Myers:

Select one:

a.

By setting future annual depreciation equal to one-sixth of the book value on January 1, 2015

b.

As a prior period adjustment

c.

By continuing to depreciate the machinery over the original fifteen year life

d.

As the cumulative effect of a change in accounting principle in 2015