Reference no: EM131161351

1. The June depreciation expense wasn notrecorded in June. How are the financial statements affected by not recording this expense in June?

A. Net income is overstated and assets are overstated
B. Net income is understated and assets are understated
C. Expenses are overstated and net income is understated
D. Expeses are understated and assets ares understated

2. Which one of the fixed assets accounts listed below will NOT have a contra asset account?

A. Office Equipment
B. Land
C. Delivery Equipment
D. Building

3. Using units of productions, which is the annual depreciation amounts for a vehicle which cost $42,000, has a salvage value of $4,000, a useful life of 4 years ad 100,000 miles, driven 22,000 miles this year?

A. $10,500
B. $10,000
C. $9,500
D. $8,360

4. Patents and tradmarks are

A. Depleted
B. Amortized
C. Expensed
D. Depreciated

5. Revenue expenditures

A. Are additional costs of plant assets that do not materially increase the assets's life or its productive capabilities
B. Are known as balance sheet expenditures
C. Extend the asset's useful life
D. Substantially benefit future periods

6. The assets section of a classified balance sheet usually includes

A. Currebt Assets, investments, plant assets, and intangible assets
B. Current assets, long-term assets, revenues, and intangible assets
C. Current assets, investments, plant assets, and equity
D. Current liabilities, investments, plant assets, amd intangible assets

7. Note receivables due in 350 days apperar on the

A. Balance sheet in the current assets section
B. Balance sheet in the fixed assets section
C. Balance sheet in the current liabilities section
D. Income statement as an expense

8. Examples of assets are

A. Cash and account receivable
B. Cash and revenue
C. Cash and rent expense
D. Common stock and revenue

9. If and asset produces more revenue in the early years, the depreciation method best suited for this asset would be the

A. Straight-line method
B. Units of depletion method
C. Double-declining method
D. Expense method

10. Which of the following would NOT be considered part of the cost of land

A. Survey and legal fees
B. Realtor commissions
C. Paving
D. Unpaid property taxes on the land

11. A company has installed a piece of machinery for a total of $76,000. In its 3rd month of operation, repairs of $1,300 would be

A. Added to the cost of the machinery
B. Treated as a machinery repairs expense
C. Placed in a seperate account to be capitalized
D. A mantenance expense

12. A compant replaced an engine on a vehicle and added the amount to repairs expense rather than adding the amount to the "vehicle" account. Which of the following would occur because of this error

A. The assets "vehicle" would be overstated
B. The assets "vehicle" would be understated
C. Repair expense would be understated
D. Net income would be overstated

13. The formula for computing annual staight-line depreciation is

A. Depreciable cost divided by useful life in years
B. Cost plus salvage value divided by the useful life in years
C. Cost less salvage value divided bt the useful life in years
D. Cost divided by useful life in years

14. Using double-declining balance, calculate the 1st two years of depreciation expense for the following piece of equipment: Cost 435,000, salvage value of $25,000, useful life of 10 years

A. Year 1 = $87,000: Year 2 = $69,600
B. Year 1= $82,000: Year 2= $65,600
C. Year 1= $80,000: Year 2= $60,000
D. Not enough info present to answer the question

15. Extraoridinary repairs

A. Are revenue expenditures
B. Extend an asset's useful life beyond its original estimate
C. Are additional costs of plant assets that do not materially increase the asset's life
D. Are expensed as incurred

16. Which depreciation method will result in the same depreciation expense every year?

A. Straigh-line method
B. Units of poduction
C. Double- Declining- Balance
D. Sum-Of Years_ Digits

17. Research and development costs (R&D) are generally

A. Listed as "long-term assets" on the balance sheet
B. Expensed and become part of the income statement
C. Listed as "current assets" on the balance sheet
D. Listed as "other intangibles" on the balance sheet

18. Depletion:

A. Is the process of allocating the cost of natural resources to periods in which they are consumed
B. Is also called depreciation
C. Is also called amortization

19. Accumulated Depreciation appears on the

A.Balance sheet in the current assets section
B. Balance sheet in the property, plant, and equiptment section
C. Balance sheet in the long term liabilites section
D. Income-statement as an operating expense

20. The total cost of an asset less its accumulated depreciation is called:

A. Historical cost
B. Book value
C. Present value
D. Current (market) value