true or false

14. A lump-sum purchase or basket purchase involves paying a single price for several assets as a group.

15. Millburn Company has acquired a property that included both land and a building for $530,000. The company hired an appraiser who has determined that the market value of the land is $320,000 and that of the building is $480,000. At what amount should the company record the cost of land? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

A) $349,800

B) $128,000

C) $265,000

D) $212,000

16. Repair work that generates a capital expenditure because it extends a plant asset's useful life past the normal expected life is known as an extraordinary repair.

17. Westin Delivery Service Company owns a delivery truck. Which of the following costs, associated with the truck, will be treated as a revenue expenditure?

A) oil change and lubrication

B) major engine overhaul

C) modification for new use

D) addition to storage capacity

18. A company's accountant capitalized a payment that should have been recorded as a revenue expenditure. How will this error affect the company's financial statements?

A) Net income will be overstated. B) Revenues will be understated. C) Assets will be understated. D) Liabilities will be understated.

19. Depreciation means that the business sets aside cash to replace an asset when it is used up.

20. The useful life of a plant asset is the length of the service period expected from the asset.

21. Amounts owed for products or services purchased on account are accounts receivable.

22. Sales Tax Payable is usually calculated as a percentage of the amount of the sale.

23. Sales revenue for a sporting goods store amounted to $526,000 for the current period. All sales are on account and are subject to a sales tax of 10%. Which of the following would be included in the journal entry to record the sales transaction?

A) a debit to Sales Revenue for $526,000

B) a credit to Accounts Receivable for $526,000

C) a debit to Sales Tax Payable for $52,600

D) a debit to Accounts Receivable for $578,600

24. Unearned revenues are current liabilities until they are earned.

25. When borrowing cash from a bank, the business is required to sign a promissory note stating that the business will pay the principal plus interest at a specified maturity date.