6. The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the A) net realizable value. B) net realizable value less normal profit margin. C) replacement cost. D) selling price less costs of completion and disposal. e bnsislqo o1 2ulg teo 7. Given the acquisition cost of product Dominoe is $20, the net realizable value for product Dominoe is $17, the normal profit for product Dominoe is $2, and the market value (replacement cost) for product Dominoe is $18, what is the proper per unit inventory price for product Dominoe applying LCM? A) $18. B) $15 C) $17. D) $20 8. Lower-of-cost-or-market is most conservative if applied to the total inventory. A) is most conservative if applied to major categories of inventory. B) is most conservative if applied to individual items of inventory. C) D) must be applied to major categories for taxes. 9. Which of the following is not a major characteristic of a plant asset? A) Possesses physical substance B) Acquired for resale C) Acquired for use D) Yields services over a number of years A 10. The cost of land does not include A) costs of grading, filling, draining, and clearing. B) costs of removing old buildings. C) costs of improvements with limited lives. D) special assessments. 11. Assets that qualify for interest cost capitalization include A) assets under construction for a company's own use. assets that are ready for their intended use in the earnings of the company B) assets that are not currently being used because of excess capacity C) All of these assets qualify for interest cost capitalization. D) 12. When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to A) the total interest cost B) a cost of capital charge for stockholders' equity C) that portion of total interest cost which would not have been incurred if expenditures for asset construction had not been made. D) that portion of weighted-average accumulated expenditures on which no interest cost was incurred. actually incurred. 13. The period of time during which interest must be capitalized ends when A) the asset is substantially complete and ready for its intended use. B) no further interest cost is being incurred. the asset is fully depreciated. C) D) the activities that are necessary to get the asset ready for its intended use have begun. 14. When a plant asset is acquired by issuance of common stock, the cost of the plant asset is properly measured by the A) par value of the stock B) stated value of the stock. C) book value of the stock. D) market price of the stock (0 reported on the balance sheet as 15. Fences and parking lots are current assets. 12 A) land improvements. oldalbnqpba b B) C) land. D) property and equipment. 16. When a company purchases land as a site for a plant,, interest costs capitalized during the period of construction are part of the: A) period cost. B) cost of acquisition. C) cost of the plant. D) cost of the land. 000.210 A Audy 002 (A 17. Termination of an asset's service due to theft, fire, etc, is called: A) special B) nonreciprocal transfers. C) speculation. D) involuntary conversion. er 000.212 (0 assessment