1.Property, plant, and equipment and intangible assets are (Points : 9)<\/p>\n
long-term revenue-producing assets.<\/p>\n
created by the normal operation of the business and include accounts receivable.<\/p>\n
all assets except cash and cash equivalents.<\/p>\n
current and long-term assets used in the production of either goods or services.<\/p>\n
2.(TCO 3) Our company exchanged land and cash of $5,000 for similar land. The book value and the fair value of the land were $90,000 and $100,000, respectively. Assuming the exchange lacks commercial substance, which amount is correct? (Points : 9)<\/p>\n
Debit Land-old $90,000<\/p>\n
Credit Land-old $90,000<\/p>\n
Debit Land-old $95,000<\/p>\n
Credit Land-old $95,000<\/p>\n
3.(TCO 2) The exclusive right to benefit from a creative work, such as a film, is a (Points : 9)<\/p>\n
patent.<\/p>\n
copyright.<\/p>\n
trademark.<\/p>\n
franchise.<\/p>\n
4.(TCO 4) Assuming an asset is used evenly over a 4-year service life, which method of depreciation will always result in the largest amount of depreciation in the first year? (Points : 9)<\/p>\n
Straight-line<\/p>\n
Units-of-production<\/p>\n
Sum-of-the-years\u2019 digits<\/p>\n
Double-declining balance<\/p>\n
5.(TCO 4) On September 30, 2013, our company purchased a machine for $100,000. The estimated service life is 10 years, with a $10,000 residual value. Our company records partial-year depreciation based on the number of months in service. Depreciation for 2014, using double-declining balance, would be (Points : 9)<\/p>\n
$16,000.<\/p>\n
$17,000.<\/p>\n
$19,000.<\/p>\n
$20,000.<\/p>\n
6.(TCO 4) A change in the estimated useful life and residual value of machinery in the current year is handled as (Points : 9)<\/p>\n
a prospective change from the current year through the remainder of its useful life, using the new estimates.<\/p>\n
a retrospective change back to the date of acquisition as though the current estimated life and residual value had been used all along.<\/p>\n
a cumulative adjustment to income in the current year for the difference in depreciation under the new versus old estimates.<\/p>\n
None of the above<\/p>\n
7.(TCO 5) Fair value and appreciation of the investee are not as relevant for investments in which of the following categories? (Points : 9)<\/p>\n
Securities reported under the equity method<\/p>\n
Held-to-maturity securities<\/p>\n
Trading securities<\/p>\n
Securities available-for-sale<\/p>\n
8.(TCO 5) Consolidated financial statements are prepared when one company has (Points : 9)<\/p>\n
accounted for the investment using the equity method.<\/p>\n
control over another company.<\/p>\n
accounted for the investment as securities available-for-sale.<\/p>\n
None of the above<\/p>\n
9.(TCO 4) Interest is not capitalized for (Points : 9)<\/p>\n
inventories routinely and repetitively produced in large quantities.<\/p>\n
assets that are constructed as discrete projects for sale or lease.<\/p>\n
assets constructed for a company’s own use.<\/p>\n
None of the above<\/p>\n
10.(TCO 2) Software development costs are capitalized if they are incurred (Points : 9)<\/p>\n
prior to the point at which technological feasibility has been established.<\/p>\n
after technological feasibility has been established but prior to the product availability date.<\/p>\n
after commercial production has begun.<\/p>\n
None of the above<\/p>\n
11.(TCO 4) The factors that need to be determined to compute depreciation are an asset’s (Points : 9)<\/p>\n
cost, residual value, and service life.<\/p>\n
cost, replacement value, and service life.<\/p>\n
fair value, residual value, and economic life.<\/p>\n
cost, residual value, and physical life.<\/p>\n
12.(TCO 5) Which of the following types of securities only includes debt securities? (Points : 9)<\/p>\n
Securities available-for-sale<\/p>\n
Held-to-maturity securities<\/p>\n
Trading securities<\/p>\n
Consolidated securities<\/p>\n
13.(TCO 1) The capitalized cost of equipment excludes (Points : 9)<\/p>\n
sales tax.<\/p>\n
shipping.<\/p>\n
insurance for the first year.<\/p>\n
installation.<\/p>\n
14.(TCO 3) The basic principle used to value an asset acquired in a nonmonetary exchange is to value it at (Points : 9)<\/p>\n
the book value of the asset given plus any cash or other monetary consideration received.<\/p>\n
the fair value of the asset(s) given up.<\/p>\n
the fair value or book value, whichever is smaller.<\/p>\n
the book value of the asset given.<\/p>\n
15.(TCO 2) Research and development (R & D) costs (Points : 9)<\/p>\n
generally pertain to activities that occur after the start of production.<\/p>\n
may be expensed or capitalized, at the option of the reporting entity.<\/p>\n
must be capitalized and amortized.<\/p>\n
None of the above<\/p>\n
16.(TCO 4) The depreciable base for an asset is (Points : 10)<\/p>\n
its service life.<\/p>\n
the excess of its cost over residual value.<\/p>\n
the difference between its replacement value and cost.<\/p>\n
the amount allowable under MACRS.<\/p>\n
17.(TCO 5) Securities that are purchased with the intent of selling them in the near future to take advantage of short-term price changes are classified as (Points : 10)<\/p>\n
trading securities.<\/p>\n
securities available-for-sale.<\/p>\n
consolidating securities.<\/p>\n
held-to-maturity securities.<\/p>\n
18.(TCO 5) Accumulated Other Comprehensive Income in the shareholders’ equity section of the balance sheet reflects changes in the fair value of securities for which type of securities? (Points : 10)<\/p>\n
Securities available-for-sale<\/p>\n
Trading securities<\/p>\n
Consolidated securities<\/p>\n
Held-to-maturity securities<\/p>\n
19.(TCO 5) The equity method of accounting for investments in voting common stock is appropriate when (Points : 10)<\/p>\n
the investor has voting control over the investee.<\/p>\n
the investor intends to hold the common stock indefinitely.<\/p>\n
the investor is assured of a continued supply of a valuable raw material.<\/p>\n
the investor can significantly influence the investee.<\/p>\n","protected":false},"excerpt":{"rendered":"
1.Property, plant, and equipment and intangible assets are (Points : 9) long-term revenue-producing assets. created by the normal operation of the business and include accounts receivable. all assets except cash and cash equivalents. current and long-term assets used in the Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49638","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49638","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=49638"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49638\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=49638"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=49638"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=49638"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}