| D. none of the above | Question 6 of 20 | 5.0 Points |
A company purchased new machinery and incurred freight, assembly, and installation costs in addition to the invoice cost of the machinery. These additional costs should be debited to __________. | A. cash | | B. machinery | | C. installation expense | | D. machinery expense | | The entry to record the cost of a property, plant, or equipment asset would include __________. | A. acquisition cost | | B. freight | | C. installation | | D. all of the above A coal mine was acquired for $2,000,000. No salvage value was expected, and the company expects to mine 2,000,000 tons of coal. During the first year, it mines and sells 220,000 tons of coal. The depletion expense is __________. | A. $2,220,000 | | B. $2,000,000 | | C. $220,000 | | D. $24,200 | Intellectual property assets are __________. | A. depreciated | | B. depleted | | C. amortized | | D. expensed | The process of writing off an intangible asset is __________. | A. depreciation | | B. depletion | | C. amortization | | D. none of the above | The cost of equipment is expensed __________. | A. at the time it is paid | | B. over the periods that benefit the company | | C. in the period it is purchased | | D. in the period it is sold | 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 | 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 | Which of the following is a non-depreciable asset? | A. desk chairs | | B. land | | C. computer | | D. building | 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 | An example of an intangible asset is __________. | A. a patent | | B. a building | | C. assembly cost | | D. land | All of the following are intangible assets except __________. | A. patents | | B. copyrights | | C. franchises | | D. Accounts Receivable | 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 | Using MACRS rates for a three-, five-, seven-, and ten-year property, what is the percentage for the depreciable rate? | A. 200 percent | | B. 150 percent | | C. 125 percent | | D. 100 percent | The depreciation method that bases the expense on the level of use instead of the passage of time is __________. | A. units-of-production | | B. straight-line | | C. modified accelerated cost recovery | | D. double-declining-balance | |
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