Question 3 of 20 Which of the following is a non-depreciable asset? | A. desk chairs | | B. land | | C. computer | | D. building | | Question 4 of 20 | 5.0 Points |
Which depreciation method does not deduct residual value when computing depreciation expense? | A. units-of-production | | B. straight-line | | C. double-declining-balance | D. both A and B Question 5 of 20 The cost of a plant asset was increased for the payment of this years insurance premium. This error would cause __________. | A. the periods net income to be overstated | | B. the periods net income to be understated | | C. the periods end assets to be understated | | D. none of the above | |
| Question 6 of 20 | 5.0 Points |
When calculating declining balance depreciation, the straight-line rate was used instead of double the straight-line rate. In the first year of ownership, this error would cause __________. | A. the periods depreciation expense to be overstated | | B. the periods depreciation expense to be understated | | C. the period end assets to be understated | | D. none of the above | | Question 7 of 20 | 5.0 Points |
Chocolate Supreme purchased new baking equipment for $15,000 subject to terms 4/10, n/45. The discount was taken. Additional costs included $900 in sales tax and $300 for installation. The total cost to be added to the machinery account is __________. | A. $15,900 | | B. $15,300 | | C. $15,000 | | D. $15,600 | | Question 8 of 20 | 5.0 Points |
A depreciation method that allocates depreciation of a plant asset based on the Tax Act of 1989 is the __________. | A. straight-line method | | B. units-of-production method | | C. modified accelerated cost recovery method | | D. double-declining-balance method | | Question 9 of 20 | 5.0 Points |
Under MACRS, the salvage value is __________. | A. added to the straight-line depreciation | | B. subtracted from the cost of the asset | | C. ignored | | D. added to the cost of the ass | | Question 10 of 20 | 5.0 Points |
Amortization of a patent was ignored. This error would cause __________. | A. the periods net income to be overstated | | B. the periods net income to be understated | | C. the period end assets to be understated | | D. none of the above | | Question 11 of 20 | 5.0 Points |
Intellectual property assets are __________. | A. depreciated | | B. depleted | | C. amortized | | D. expensed | | Question 12 of 20 | 5.0 Points |
A tractor costing $80,000 is depreciated using MACRS. The tractor qualifies as a three-year property and has a scrap value of $20,000. The depreciation rates are: | Year 1: | 33.33% | | Year 2: | 44.45% | | Year 3: | 14.81% | | Year 4: | 7.41% | What is the depreciation expense for Year 2? | A. $44,450 | | B. $35,560 | | C. $26,670 | | D. $20,000 | | Question 13 of 20 | 5.0 Points |
According to the MACRS tax rate table, which of the following classes uses straight-line depreciation? | A. residential rental property | | B. automobiles | | C. railroad tracks | | D. race horses | | Question 14 of 20 | 5.0 Points |
Which of the following is an example of a land improvement? | A. shrubbery | | B. fence | | C. driveway | | D. all of the above | | Question 15 of 20 | 5.0 Points |
All of the following are intangible assets except __________. | A. patents | | B. copyrights | | C. franchises | | D. Accounts Receivable | | Question 16 of 20 | 5.0 Points |
The exclusive right to produce and sell a manuscript is called a __________. | A. copyright | | B. franchise | | C. patent | | D. goodwill | | Question 17 of 20 | 5.0 Points |
A company purchases a patent for $50,000. The patent will be amortized over five years. The entry to record the amortization in the first year is __________. | A. debit Patents $50,000; credit Cash $50,000 | | B. debit Amortization of Patents $10,000; credit Patents $10,000 | | C. debit Amortization of Patents $50,000; credit Patents $50,000 | | D. debit Patents $10,000; credit Amortization of Patents $10,000 | | Question 18 of 20 | 5.0 Points |
Salvage value was ignored when originally calculating the units-of-production depreciation. This error would cause __________. | A. the periods net income to be overstated | | B. the periods net income to be understated | | C. the period end assets to be overstated | | D. none of the above | | Question 19 of 20 | 5.0 Points |
The process of writing off an intangible asset is __________. | A. depreciation | | B. depletion | | C. amortization | | D. none of the above | | Question 20 of 20 | 5.0 Points |
The allocation of the cost of a natural resource is __________. | A. depreciation | | B. depletion | | C. amortization | | D. accrual | | |
