Q1: If a capital asset is retired before it is fully amortized, and the residual value received is less than the asset's book value..

A)

a gain on disposal occurs

B)

additional amortization expense must be recorded

C)

a loss on disposal occurs

D)

there is no gain or loss on disposal

Q2: The cost of successfully defending a patent in an infringement suit should be..

A)

deducted from the book value of the patent

B)

recognized as a loss in the current period

C)

added to the cost of the patent

D)

charged to Legal Expenses

Q3: A promissory note is issued when:

A)

One business loans another business money

B)

All of the above

C)

An agreement is made between companies for outstanding accounts receivable that will now earn interest.

D)

When an extraordinary credit term is granted

Q4: 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 the land would be recorded at...

A)

$70,000

B)

$77,000

C)

$63,000

D)

$7,000

Q5: A capital asset was purchased on January 1 for $30,000 with an estimated residual value of $6,000 at the end of its useful life. The current year's Amortization Expense is $3,000 calculated on the straight-line basis and the balance of the Accumulated Amortization account at the end of the year is $15,000. The remaining useful life of the plant asset is...

A)

5 years

B)

10 years

C)

3 years

D)

8 years

Q6: A company purchased property for $300,000. The property included an acre of land valued at $50,000, a building valued at $150,000, and equipment valued at $125,000.

A)

$150,000

B)

$140,000

C)

$135,000

D)

$138,461

Q7: American Express is an example of a...

A)

Debit Card

B)

Non-Bank Credit Card

C)

Bank Credit Card

D)

Retail Store Card

Q8: The balance in the Accumulated Amortization account represents the...

A)

amount charged to expense in the current period

B)

cash fund to be used to replace capital assets

C)

amount charged to expense since the aquisition of the capital asset

D)

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

Q9: In calculating amortization, residual value is..

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

subtracted from acumulated amortization to deterime the capital asset's amortizable cost

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

ignored in all the amortization methods

Q10: Intangible assets include...

A)

assets that provide future benefits through special rights and privileges

B)

government services

C)

property, plant, and equipment

D)

natural resources, such as mineral deposits and oil and gas reserves

Q11: A company purchased factory equipment for $100,000. It is estimated that the equipment willhave 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..

A)

$40,000

B)

$36,000

C)

$21,600

D)

$24,000

Q12: A company purchased property for $300,000. The property included an acre of land valued at $50,000, a building valued at $150,000, and equipment valued at $125,000.

A)

$125,000

B)

$120,000

C)

$118,723

D)

$115,384

Q13: Sales made by using debit cards are:

A)

Recorded as a debit to Cash

B)

Recorded as a debit to Sales

C)

Recorded as a debit to Accounts Receivable

D)

Recorded as a debit to Inventory

Q14: A factory machine was purchased for $20,000 on January 1, 2001. It was estimated that itwould 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 2001 was 4,000 hours and the company uses the units-of-activity method of amortization, the amount of amortization expense for 2001 would be..

A)

$2,000

B)

$4,000

C)

$1,600

D)

$3,200

Q15: A company purchased property for $300,000. The property included an acre of land valued at $50,000, a building valued at $150,000, and equipment valued at $125,000.

THe land will be recorded at a cost of..

A)

$45,000

B)

$48,234

C)

$46,154

D)

$50,000

There are 15 multiple choice question in total, please help me to do it fast and precise!!! Thank you very much!!