1. Which of the following would not be included in the Land account?

A.back property taxes paid

B.brokerage commissions connected with the purchase of the land

C.paving costs for a driveway

D.survey fees connected with the purchase of the land

2.Which of the following expenses is most closely associated with tangible

longminuslived

assets?

A.depletion

B.interest

C.accumulation

D.depreciation

3.Which of the following statements is true?

A.Depreciation means that a business sets aside cash to replace assets as they become fully amortized.

B.Depreciation is a process of objective valuation.

C.Accumulated depreciation represents a growing amount of cash to be used to replace the existing asset.

D.Accumulated depreciation is that portion of property, plant, and equipment's cost that has already been recorded as an expense.

4.At the end of an asset's useful life, the balance in Accumulated Depreciation will:

A.be greater under unitsminusofminusproduction depreciation than under straightminusline depreciation

B.be a lesser amount under doubleminusdecliningminusbalance depreciation than under unitsminusofminusproduction depreciation

C.be a greater amount under straightminusline depreciation than under doubleminusdecliningminusbalance depreciation

D. be the same amount under all the depreciation methods

5. Lauter Tun Corporation acquired equipment on January 1, 2012, for $300,000. The equipment had an estimated useful life of 10 years and an estimated salvage value of $25,000. On January 1, 2015, Lauter Tun Corporation revised the total useful life of the equipment to 8 years and the estimated salvage value to be $10,000. Compute depreciation expense for the year ending December 31, 2015, if Lauter Tun Corporation uses straightminusline depreciation.

A.$38,500

B.$25,938

C.$43,500

D.$41,500

6.A loss is recorded on the sale of property, plant, and equipment when:

A.a loss on the sale of property, plant, and equipment is not allowed according to GAAP

B.the asset is sold for a price greater than the asset's book value

C.the asset's book value is greater than the amount of cash received from the sale

D.the asset's book value is less than the balance in Accumulated Depreciation

7.Equipment is acquired by issuing a note payable for $50,000 and a making a down payment of $20,000. The statement of cash flows will report a:

A.$20,000 outflow in the operating activities section

B.$70,000 outflow in the investing activities section

C.$50,000 inflow in the financing activities section

D.$20,000 outflow in the investing activities section

8.Copyrights are granted for the life of the author plus:

A.100 years

B.40 years

C.50 years

D.10 years

9.Bavarian Purity Corporation purchased equipment for $32,000. Bavarian Purity also paid $400 for freight and insurance while the equipment was in transit. Sales tax amounted to $240. Insurance, taxes, and maintenance the first year of use cost $1,000. How much should Bavarian Purity Corporation capitalize as the cost of the equipment?

A.$32,400

B.$32,000

C.$32,640

D.$31,640

10.

Depreciable cost is defined as:

A.asset's cost minus estimated residual value

B.cost minus accumulated depreciation

C.salvage value

D.book value