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 |
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. |