QUESTION 4 Which of the following is not a capital expenditure? O 1. Annual maintenance expenditures on a fleet of delivery trucks. O 2. Sales tax paid in conjunction with the purchase of new machinery 3. Installation of elevators to replace escalators O 4. An amount paid to acquire a patent with a remaining life of only three years QUESTION 5 All of the following may be considered intangible assets except O 1. Land 2. Copyrights O 3. Franchises O 4. Goodwill QUESTION 6 Which of the following is not classified among the operating activities in a statement of cash flows? O 1. Payment of interest on a bank loan. O 2. Payment of the principal amount owed on a bank loan. O 3. Payment of an account payable to a merchandise supplier O 4. Payment of income taxes. QUESTION 7 Which of the following would not be considered part of the cost of equipment recently purchased? O a. Sales tax. O b. Transportation charges O C. Installation and setup charges. O d. All three are included as part of the capitalized purchase cost. QUESTION 8 An asset which costs $18,800 and has accumulated depreciation of $6,000 is sold for $11,600. What amount of gain or loss will be recognized when the asset is sold? 0 1 . A gain of $1,200 O 2. A loss of $1,200 O 3. A gain of $7.200 O 4. A loss of $7,200