Multiple Choice

1. Which of the following is not a characteristic of plant assets?

a. Plant assets are acquired for resale to customers in the normal course of business

b. Plant assets are depreciated over their estimated useful lives.

c. Plant assets have a tangible or physical quality.

d. Plant assets are used in the operation of the business.

2. On January 1, 20X1, a plant asset is acquired for $25,000. The asset has an estimated useful life of four years and an estimated salvage value of $5,000. If the straight-line method of depreciation is used, the balance in the Accumulated Depreciation account on December 31, 20X3, will be

1. $5,000.

2. $15,000.

3. $12,500.

4. $10,000.

3. On July 1, 20X2, a plant asset was acquired for $20,000 and had an estimated useful life of five years and an estimated salvage value of $5,000. If the straight-line method of depreciation is used, what would be the amount of the adjusting entry for depreciation expense at December 31, 20X2?

1. $4,500

2. $1,500

3. $3,000

4. $2,250

4. On January 1, 20X0, a plant asset was acquired for $20,000 and had an estimated useful life of four years and an estimated salvage value of $4,000. If the double decliningbalance method is used, the balance in the Accumulated Depreciation account on December 31, 20X1, will be

5. $10,000.

6. $15,000.

7. $8,000.

8. $12,000.