Question
1-A long-term asset is recorded at the: Cost of the asset. Additional costs to get the asset ready for use. Cost of the asset plus
1-A long-term asset is recorded at the:
Cost of the asset.
Additional costs to get the asset ready for use.
Cost of the asset plus all costs necessary to the asset ready for use.
Cost of the asset less all costs necessary to the asset ready for use.
2- The Open Grill incurred the following costs in acquiring a new piece of land:
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|
|
|
Cost of the land | $ | 80,000 |
|
Commissions |
| 4,800 |
|
Liability insurance for the first year |
| 1,200 |
|
Cost of removing existing building |
| 20,000 |
|
Sale of salvaged materials |
| (4,000 | ) |
Total costs | $ | 102,000 |
|
What is the total recorded cost of the land?
$102,000.
$100,800.
$106,000.
$80,000.
3- The Cheese Factory incurred the following costs related to acquiring a new piece of equipment:
|
|
|
|
Cost of the equipment | $ | 50,000 |
|
Sales tax (8%) |
| 4,000 |
|
Shipping |
| 3,000 |
|
Installation |
| 2,000 |
|
Depreciation during the first month |
| 1,000 |
|
Total costs | $ | 60,000 |
|
What is the total recorded cost of the equipment?
$60,000.
$50,000.
$57,000.
$59,000.
4- Which of the following is properly recorded as an intangible asset?
An internally developed trademark.
A piece of land.
A purchased patent.
An internally developed copyright.
5- Which of the following correctly describes the nature of depreciation?
Depreciation represents the valuation of property, plant, and equipment over its service life.
Depreciation represents the valuation of an intangible asset over its service life.
Depreciation represents the allocation of the cost of property, plant, and equipment over its service life.
Depreciation represents the allocation of the cost of an intangible asset over its service life.
6-Accumulated depreciation is
An expense account.
An asset.
A contra-asset.
A liability.
7-Depreciation in accounting is the:
Decrease in fair value of an asset.
Decrease in selling price of an asset.
Allocation of an assets cost to an expense over time.
Change in fair value of an asset.
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