1. Which of the following would be classified as a revenue expenditure?

• a. Cost to ship a purchased machine to the factory.
• b. Sales tax on a purchased machine.
• c.Installation costs for a new machine.
• d. Cost to repair a new machine damaged during installation.
• e. All of the above would be classified as revenue expenditures.
• f. None of the above would be classified as revenue expenditures

2.

On a statement of cash flows, gains and losses on disposal of plant assets are shown as cash flows in the:

• a. Operating activities section.
• b. Investing activities section.
• c. Financing activities section.
• d. None of the above.

3. Companies cannot continue to depreciate a fully-depreciated asset, even if the asset is still being used for productive purposes.

True

False

4. Acquisitions and dispositions of a company's fixed operating assets are reported in the operating activities section of the cash flows statement.

• True
• False

5. Which of the following is not a characteristic of plant assets?

• a. Used in the business.
• b.Held as an investment.
• c. Long-lived.
• d. Tangible.

6. All of the following are based on estimates except:

• a. Acquisition cost.
• b. Useful life.
• . Depreciable cost.
• d.Salvage value
• 7. The "held-to-maturity" classification is not applicable for investments in equity securities.
• True
• False