True/False Indicate whether the sentence or statement is True or False. All questions are weighted equally. I 1. When a company purchases land with no intention of developing it for business operational use, and intends to sell it in the near future, interest costs associated with those expenditures do not qualify for interest capitalization. F 2. Depreciation is a means of determining an asset's fair value. I 3. If an expenditure subsequent to acquisition of assembly-line manufacturing equipment provides value-added benefits resulting in substantial increased sales in future periods, the expenditure should be capitalized. F 4. IFRS allows the use of the same depreciation methods as U.S. GAAP including MACRS. F 5. Changes in the estimates involved in depreciation, depletion, and amortization (i.e., salvage value or useful life) require retroactive restatement of journal entries and financial statements. F 6. Goodwill should be amortized. E 7. Book Value, Carrying Value, and Carrying Amount are all accounting terms with different definitions and have different meanings. HI 8. The purchase of land with no intent to use it in operations would be recorded as an investment. F 9. U.S. GAAP, like IFRS, permits the write-up for subsequent recoveries of impairment, back up to the original amount before impairment in all circumstances. True/False Indicate whether the sentence or statement is True or False. All questions are weighted equally. I 1. When a company purchases land with no intention of developing it for business operational use, and intends to sell it in the near future, interest costs associated with those expenditures do not qualify for interest capitalization. F 2. Depreciation is a means of determining an asset's fair value. I 3. If an expenditure subsequent to acquisition of assembly-line manufacturing equipment provides value-added benefits resulting in substantial increased sales in future periods, the expenditure should be capitalized. F 4. IFRS allows the use of the same depreciation methods as U.S. GAAP including MACRS. F 5. Changes in the estimates involved in depreciation, depletion, and amortization (i.e., salvage value or useful life) require retroactive restatement of journal entries and financial statements. F 6. Goodwill should be amortized. E 7. Book Value, Carrying Value, and Carrying Amount are all accounting terms with different definitions and have different meanings. HI 8. The purchase of land with no intent to use it in operations would be recorded as an investment. F 9. U.S. GAAP, like IFRS, permits the write-up for subsequent recoveries of impairment, back up to the original amount before impairment in all circumstances
