1. Which of the following is/are considered a plant asset under US GAAP? (Select all that apply.)

• a. Research and development expenditures.
• b. Inventory.
• c. Assets acquired under finance leases.
• d. Land held for sale

2. Depreciation and amortization are reported as positive cash flows on the statement of cash flows.

True

False

3. Companies cannot continue to depreciate a fully-depreciated asset, even if the asset is still being used for productive purposes.

True

False

4. A company purchased land with an existing building on it. It removed the existing building and constructed a new one. Which of the following costs are capitalized as part of the company's fixed assets? (Select all that apply.)

• a. Costs to grade the land and prepare the foundation for the new building.
• b. Building permit costs.
• c. Interest on the construction loan.
• d. Acquisition cost of the land and existing building.
• e. Demolition and removal costs for the existing building.
• f. Architect's fee for the design of the new building.

5. Operational investments in non-renewable assets are referred to as:

• a. Long-term investments.
• b. Plant assets.
• c. Natural resources.
• d. Intangible assets.

6. Companies' noncurent operating assets include which of the following? (Select all that apply.)

• a. Fixed assets.
• b. Natural resources.
• c. Long-lived intangible assets.
• d. Long-term investments.
• e. Inventories.
• f. Cash and cash equivalents.

7. Which of the following would be classified as a revenue expenditure?

• a. Cost to ship a purchased machine to the factory.
• b. Sales tax on a purchased machine.
• c.Installation costs for a new machine.
• d. Cost to repair a new machine damaged during installation.
• e. All of the above would be classified as revenue expenditures.
• f. None of the above would be classified as revenue expenditures.