1.All of the following are directly attributable costs in the acquisition or construction of an item of PPE except

a.Costs of employee benefits arising directly from the construction or acquisition of PPE

b.Costs of site preparation

c.Broker's commission

d.Cost of staff training

2.All of the following are expensed outright and do not form part of the cost of an item of PPE except

a.Installation and assembly costs after the asset is in the location and condition intended by management.

b.Professional fees incurred in the training of staff who will be operating the machinery acquired.

1. Administration and other general overhead costs.
2. Insurance costs while a purchased equipment is in-transit.

3.Which of the following is included in the initial cost of an item of PPE?

a.Trade discounts

b.Cash discounts not taken

c.Present value of the estimates of decommissioning and restoration costs

d.Refundable purchase taxes

4.According to the GAM for NGAs, the costs incurred during the construction of an asset are

a.expensed in the period incurred.

b.capitalized in the building account or other account.

c.capitalized in a construction in progress account.

d.initially recorded in the registries and recorded in the journals only when the construction is done and the asset is turned over and accepted by the government entity.

5.Government entities recognize depreciation

a.on a weekly basis.

b.on a monthly basis.

c.only at year-end.

d.any of these as a matter of accounting policy choice.

6.Entity A, a government entity, acquires an equipment on December 16, 20x1. Which of the following is correct?

a.The equipment will not be depreciated in the current year.

b.The equipment will be assigned a residual value of 15%.

c.The equipment will be classified as inventory if it has a cost of less than 25,000.

d.The equipment will only be depreciated for 2 weeks in the current year.

7.According to the GAM for NGAs, to qualify as intangible asset, an item must possess all of the following elements except

a.Identifiability

b.Held for distribution

c.Control over a resource

d.Existence of future economic benefits or service potential

8.According to the GAM for NGAs, an intangible asset is identifiable when it

a.is separable, i.e., capable of being separated and divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of whether the entity intends to do so.

b.arises from binding arrangements including contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

c.a or b

d.a and b

9.An active market is a market in which all the following conditions exist, except

a.the items traded in the market are homogeneous

b.willing buyers and sellers can normally be found at any time

c.prices are available to the public

d.the price is most advantageous

10.It is the systematic allocation of the depreciable amount of an intangible asset over its useful life.

a.Cost allocation concept

b.Impairment

c.Depreciation

d.Amortization

11.It refers to the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems, or services before the start of commercial production or use.

a.Research

b.Development

c.R & D activities

d.Internal generation

12.Goodwill is considered an unidentifiable asset because

a.it cannot be sold separately and therefore not separable.

b.it does not arise from contractual rights.

c.it has physical substance.

d.a and b