Intangible assets include

Question 1 options:

a)	property, plant, and equipment.

b)	natural resources, such as mineral deposits and oil and gas reserves.

c)	assets that provide future benefits through special rights and privileges.

d)	government services.

Question 2 (1 point)

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A company purchased land for $70,000 cash. $7,000 was spent for demolishing an old building on the land before construction of a new building could start Under the cost principle, the cost of land would be recorded at:

Question 2 options:

a)

$77,000.

b)

$70,000.

c)

$63,000.

d)

$7,000.

Question 3 (1 point)

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The balance in the Accumulated Amortization account represents the

Question 3 options:

a)	cash fund to be used to replace capital assets.

b)	amount to be deducted from the cost of the capital asset to arrive at its fair market value.

c)	amount charged to expense in the current period.

d)	amount charged to expense since the acquisition of the capital asset.

Question 4 (1 point)

The net book value of an asset is equal to the

Question 4 options:

	asset's market value less its historical cost.
	asset's cost less amortization expense.
	replacement cost of the asset.
	asset's cost less accumulated amortization.

Question 5 (1 point)

In calculating amortization, residual value is

Question 5 options:

a)	the fair market value of a capital asset on the date of acquisition.

b)	subtracted from accumulated amortization to determine the capital asset's amortizable cost.

c)	an estimate of a capital asset's value at the end of its useful life.

d)	ignored in all the amortization methods.

Question 6 (1 point)

The declining-balance method of amortization produces

Question 6 options:

	a decreasing amortization expense each period.
	an increasing amortization expense each period.
	a declining percentage rate each period.
	a constant amount of amortization expense each period.

Question 7 (1 point)

A company purchased factory equipment for $100,000. It is estimated that the equipment will have a $10,000 residual value at the end of its estimated 5-year useful life. If the company uses the double declining-balance method of amortization, the amount of annual amortization recorded for the second year after purchase would be

Question 7 options:

a)

$40,000.

b)

$24,000.

c)

$36,000.

d)

$21,600.

Question 8 (1 point)

A factory machine was purchased for $20,000 on January 1, 2015. It was estimated that it would have a $4,000 residual value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. If the actual number of machine hours run in 2015 was 4,000 hours and the company uses the units-of-activity method of amortization, the amount of amortization expense for 2015 would be

Question 8 options:

a)

$2,000.

b)

$3,200.

c)

$4,000.

d)

$1,600.

Question (1 point)

Which of the following methods of calculating amortization is production based?

Question options:

	Straight-line
	Declining-balance
	Units-of-activity
	None of these

Management should select the amortization method that

Question options:

	is easiest to apply.
	best measures the capital asset's market value over its useful life.
	best measures the capital asset's contribution to revenue over its useful life.
	has been used most often in the past by the company.

These are all one question.