Accounting 1 chapter 9 practice quiz

All <b>except</b> which of the following will be included in the cost of a fixed asset?

mistakes in installation

All of the following are considered fixed assets <b>except</b>

copyrights

Which of the following is the account that will be used to transfer the fixed asset cost to an expense?

depreciation expense

The estimated value of an asset at the end of its useful life is called all of the following <b>except</b>

book value

The Cardinal Industries purchased a generator which cost $11,000. It has an estimated life of 5 years and a residual value of $1,000. It is estimated that it will be good for 5,000 hours. Compute the depreciation expense for the first full year using the straight-line method of depreciation.

Feedback: Correct. $11,000 - $1,000 = $10,000 / 5 years = $2,000 depreciation per year

$2,000

The Cardinal Industries purchased a generator which cost $11,000. It has an estimated life of 5 years and a residual value of $1,000. It is estimated that it will be good for 5,000 hours. Compute the depreciation expense for the first year using the units-of-production method of depreciation if the generator was used for 1,040 hours.

Feedback: Correct. $11,000 - $1,000 = $10,000 / 5,000 hours = $2.00 per hour × 1,040 hours = $2,080.

$2,080

Which of the following is NOT one of the factors used to determine depreciation expense?

All of the choices are correct

A machine was purchased at a cost of $78,000. The equipment had an estimated useful life of 5 years and a residual value of $3,000. Assuming the equipment was sold at the end of year 4 for $8,000, determine the gain or loss on the sale of equipment. (Assume the straight-line depreciation method.)

Feedback: Correct. ($78,000 - $3,000) / 5 = $15,000. $15,000 × 4 = $60,000. $78,000 - $60,000 = $18,000. $8,000 - $18,000 = ($10,000) loss.

Accumulated depreciation 60,000
Cash 8,000
Loss on sale of asset 10,000
Machine 78,000

a loss of $10,000

Equipment was purchased at a cost of $78,000. The equipment had an estimated useful life of 5 years and a residual value of $3,000. Assuming the equipment was sold at the end of year 4 for $8,000, which of the following will be included in the journal entry? (Assume the straight-line depreciation method.)

Accumulated depreciation, debit $60,000

An asset with a net book value of $4,725 was discarded, having no market value. How much will be recorded as a loss or gain on disposal?

loss of $4,725

A fixed asset should be removed from the accounts <b>except</b>

when it is fully depreciated

Which of the following statements is true regarding goodwill?

In a purchase of a business at a price in excess of the fair value of its net assets, goodwill is recorded as the excess.

The best definition of a patent is

the exclusive right to produce and sell goods with one or more unique features.

The best definition of a copyright is

the exclusive right to publish and sell literary, artistic, or musical compositions

All of the following will be found under the caption of "property, plant, and equipment" in the balance sheet <b>except</b>

trademark

Tangible and intangible assets are normally presented on the balance sheet as

They will be listed separately as property, plant, and equipment and intangible assets.

Intangible assets are reported on the balance sheet

after the fixed assets

A copy machine was purchased for $35,000. It is estimated that the machine will have a useful life of 4 years with a residual value of $3,000. How much will be depreciated during the first full year using the straight-line method of depreciation?

$8,000 Feedback: Correct. ($35,000 - $3,000) /4 = $8,000

A copy machine was purchased for $35,000. It is estimated that the machine will have a useful life of 4 years with a residual value of $3,000. It is estimated that the machine will make 2,000,000 copies. Using the units-of-output method to depreciate the copy machine, how much will be depreciated if during the first year 550,000 copies were made?

$8,800

Which of the following is <b>not</b> depreciated?

land

A machine was purchased at a cost of $52,000. The equipment had an estimated useful life of 7 years and had a residual value of $3,000. Assuming the equipment was sold at the end of year 6 for $14,000, which of the following will be included in the journal entry? (Assume the straight-line depreciation method.)

Accumulated depreciation, debit $42,000

Which of the following will be classified as a fixed asset in a movie theater?

a popcorn machine

If the asset is long lived but <b>not</b> used in a productive manner it will be classified as

an investment

The Cardinal Industries purchased a generator which cost $11,000. It has an estimated life of 5 years and a residual value of $1,000. It is estimated that it will be good for 5,000 hours. Compute the depreciation expense for the second year using the double-declining-balance method of depreciation.

$2,640

The best definition of a trademark is

a name, term, or symbol used to identify a business or its product.

Which of the following statements is true regarding goodwill?

In a purchase of a business at a price in excess of the fair value of its net assets, goodwill is recorded as the excess.

The expensing of intangible assets is called

amortization

A copy machine was purchased for $35,000. It is estimated that the machine will have a useful life of 4 years with a residual value of $3,000. It is estimated that the machine will make 2,000,000 copies. Using the units-of-output method to depreciate the copy machine, how much will be depreciated if during the first year 550,000 copies were made?

$8,800

A machine was purchased at a cost of $70,000. The equipment had an estimated useful life of 8 years and had a residual value of $6,000. Assuming the equipment was sold at the end of year 6 for $14,000, determine the gain or loss on the sale of the equipment. (Assume the straight-line depreciation method.)

a loss of $8,000 Feedback: Correct. ($70,000 - $6,000) / 8 = $8,000. $8,000 × 6 = $48,000. $70,000 - $48,000 = $22,000.$22,000 - $14,000 = $8,000 loss. Accumulated depreciation 48,000 Cash 14,000 Loss on sale of asset 8,000 Machine 70,000

In regards to discarding fixed assets, which of the following is <b>not</b> true?

If an asset has not been fully depreciated, depreciation should not be recorded before removing the asset from the accounting records

Amortization and depreciation will be found on the income statement as

separate expenses.

Accounting 1 chapter 9 practice quiz - Subjecto.com

Accounting 1 chapter 9 practice quiz

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All <b>except</b> which of the following will be included in the cost of a fixed asset?

mistakes in installation

All of the following are considered fixed assets <b>except</b>

copyrights

Which of the following is the account that will be used to transfer the fixed asset cost to an expense?

depreciation expense

The estimated value of an asset at the end of its useful life is called all of the following <b>except</b>

book value

The Cardinal Industries purchased a generator which cost $11,000. It has an estimated life of 5 years and a residual value of $1,000. It is estimated that it will be good for 5,000 hours. Compute the depreciation expense for the first full year using the straight-line method of depreciation.

Feedback: Correct. $11,000 – $1,000 = $10,000 / 5 years = $2,000 depreciation per year

$2,000

The Cardinal Industries purchased a generator which cost $11,000. It has an estimated life of 5 years and a residual value of $1,000. It is estimated that it will be good for 5,000 hours. Compute the depreciation expense for the first year using the units-of-production method of depreciation if the generator was used for 1,040 hours.

Feedback: Correct. $11,000 – $1,000 = $10,000 / 5,000 hours = $2.00 per hour × 1,040 hours = $2,080.

$2,080

Which of the following is NOT one of the factors used to determine depreciation expense?

All of the choices are correct

A machine was purchased at a cost of $78,000. The equipment had an estimated useful life of 5 years and a residual value of $3,000. Assuming the equipment was sold at the end of year 4 for $8,000, determine the gain or loss on the sale of equipment. (Assume the straight-line depreciation method.)

Feedback: Correct. ($78,000 – $3,000) / 5 = $15,000. $15,000 × 4 = $60,000. $78,000 – $60,000 = $18,000. $8,000 – $18,000 = ($10,000) loss.

Accumulated depreciation 60,000
Cash 8,000
Loss on sale of asset 10,000
Machine 78,000

a loss of $10,000

Equipment was purchased at a cost of $78,000. The equipment had an estimated useful life of 5 years and a residual value of $3,000. Assuming the equipment was sold at the end of year 4 for $8,000, which of the following will be included in the journal entry? (Assume the straight-line depreciation method.)

Accumulated depreciation, debit $60,000

An asset with a net book value of $4,725 was discarded, having no market value. How much will be recorded as a loss or gain on disposal?

loss of $4,725

A fixed asset should be removed from the accounts <b>except</b>

when it is fully depreciated

Which of the following statements is true regarding goodwill?

In a purchase of a business at a price in excess of the fair value of its net assets, goodwill is recorded as the excess.

The best definition of a patent is

the exclusive right to produce and sell goods with one or more unique features.

The best definition of a copyright is

the exclusive right to publish and sell literary, artistic, or musical compositions

All of the following will be found under the caption of "property, plant, and equipment" in the balance sheet <b>except</b>

trademark

Tangible and intangible assets are normally presented on the balance sheet as

They will be listed separately as property, plant, and equipment and intangible assets.

Intangible assets are reported on the balance sheet

after the fixed assets

A copy machine was purchased for $35,000. It is estimated that the machine will have a useful life of 4 years with a residual value of $3,000. How much will be depreciated during the first full year using the straight-line method of depreciation?

$8,000 Feedback: Correct. ($35,000 – $3,000) /4 = $8,000

A copy machine was purchased for $35,000. It is estimated that the machine will have a useful life of 4 years with a residual value of $3,000. It is estimated that the machine will make 2,000,000 copies. Using the units-of-output method to depreciate the copy machine, how much will be depreciated if during the first year 550,000 copies were made?

$8,800

Which of the following is <b>not</b> depreciated?

land

A machine was purchased at a cost of $52,000. The equipment had an estimated useful life of 7 years and had a residual value of $3,000. Assuming the equipment was sold at the end of year 6 for $14,000, which of the following will be included in the journal entry? (Assume the straight-line depreciation method.)

Accumulated depreciation, debit $42,000

Which of the following will be classified as a fixed asset in a movie theater?

a popcorn machine

If the asset is long lived but <b>not</b> used in a productive manner it will be classified as

an investment

The Cardinal Industries purchased a generator which cost $11,000. It has an estimated life of 5 years and a residual value of $1,000. It is estimated that it will be good for 5,000 hours. Compute the depreciation expense for the second year using the double-declining-balance method of depreciation.

$2,640

The best definition of a trademark is

a name, term, or symbol used to identify a business or its product.

Which of the following statements is true regarding goodwill?

In a purchase of a business at a price in excess of the fair value of its net assets, goodwill is recorded as the excess.

The expensing of intangible assets is called

amortization

A copy machine was purchased for $35,000. It is estimated that the machine will have a useful life of 4 years with a residual value of $3,000. It is estimated that the machine will make 2,000,000 copies. Using the units-of-output method to depreciate the copy machine, how much will be depreciated if during the first year 550,000 copies were made?

$8,800

A machine was purchased at a cost of $70,000. The equipment had an estimated useful life of 8 years and had a residual value of $6,000. Assuming the equipment was sold at the end of year 6 for $14,000, determine the gain or loss on the sale of the equipment. (Assume the straight-line depreciation method.)

a loss of $8,000 Feedback: Correct. ($70,000 – $6,000) / 8 = $8,000. $8,000 × 6 = $48,000. $70,000 – $48,000 = $22,000.$22,000 – $14,000 = $8,000 loss. Accumulated depreciation 48,000 Cash 14,000 Loss on sale of asset 8,000 Machine 70,000

In regards to discarding fixed assets, which of the following is <b>not</b> true?

If an asset has not been fully depreciated, depreciation should not be recorded before removing the asset from the accounting records

Amortization and depreciation will be found on the income statement as

separate expenses.

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