Ch-10-test-bank-&-solutions-fixed-assets-and-intan

©2012CengageLearning.AllRightsReserved.ThiseditionisintendedforuseoutsideoftheU.S.only,withcontentthatmaybedifferentfromtheU.S.Edition.Maynotbescanned,copied,duplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.Chapter10—FixedAssetsandIntangibleAssetsTRUE/FALSE1.Long-livedassetsthatareintangibleinnature,usedintheoperationsofthebusiness,andnotheldforsaleintheordinarycourseofbusinessarecalledfixedassets.ANS:F2.Theacquisitioncostsofproperty,plant,andequipmentshouldincludeallnormal,reasonableandnecessarycoststogettheassetinplaceandreadyforuse.ANS:TPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting3.Whenlandispurchasedtoconstructanewbuilding,thecostofremovinganystructuresonthelandshouldbechargedtothebuildingaccount.ANS:FPTS:1DIF:ModerateOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting4.LandacquiredasaspeculationisreportedunderInvestmentsonthebalancesheet.ANS:TPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting5.Standbyequipmentheldforuseintheeventofabreakdownofregularequipmentisreportedasproperty,plant,andequipmentonthebalancesheet.ANS:TPTS:1DIF:ModerateOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting6.Thecostofrepairingdamagetoamachineduringinstallationisdebitedtoafixedassetaccount.ANS:FPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting7.Duringconstructionofabuilding,thecostofinterestonaconstructionloanshouldbechargedtoanexpenseaccount.ANS:FPTS:1DIF:ModerateOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting8.Thecostofcomputerequipmentdoesnotincludetheconsultant'sfeetosuperviseinstallationoftheequipment.ANS:FPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting©2012CengageLearning.AllRightsReserved.ThiseditionisintendedforuseoutsideoftheU.S.only,withcontentthatmaybedifferentfromtheU.S.Edition.Maynotbescanned,copied,duplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.9.Capitalexpendituresarecostsofacquiring,constructing,adding,orreplacingproperty,plantandequipment.ANS:TPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting10.Thecostofnewequipmentiscalledrevenueexpenditurebecauseitwillhelpgeneraterevenuesinthefuture.ANS:FPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting11.Acapitalleaseisaccountedforasiftheassethasbeenpurchased.ANS:TPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting12.Anintangibleassetisonethathasaphysicalexistence.ANS:FPTS:1DIF:ModerateOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting13.Longlivedassetsheldforsaleareclassifiedasfixedassets.ANS:FPTS:1DIF:EasyOBJ:10-01NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting14.Functionaldepreciationoccurswhenafixedassetisnolongerabletoprovideservicesatthelevelforwhichitwasintended.ANS:TPTS:1DIF:EasyOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting15.Thenormalbalanceoftheaccumulateddepreciationaccountisdebit.ANS:FPTS:1DIF:EasyOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting16.Allproperty,plant,andequipmentassetsaredepreciatedovertime.ANS:FPTS:1DIF:ModerateOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting17.Thebookvalueofafixedassetreportedonthebalancesheetrepresentsitsmarketvalueonthatdate.ANS:FPTS:1DIF:EasyOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting18.Thedepreciablecostofabuildingisthesameasitsacquisitioncost.ANS:FPTS:1DIF:EasyOBJ:10-02©2012CengageLearning.AllRightsReserved.ThiseditionisintendedforuseoutsideoftheU.S.only,withcontentthatmaybedifferentfromtheU.S.Edition.Maynotbescanned,copied,duplicated,orpostedtoapubliclyaccessiblewebsite,inwholeorinpart.NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting19.Itisnecessaryforacompanytousethesamedepreciationmethodforallofitsdepreciableassets.ANS:FPTS:1DIF:ModerateOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting20.Anestimateoftheamountwhichanassetcanbesoldattheendofitsusefullifeiscalledresidualvalue.ANS:TPTS:1DIF:EasyOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting21.Oncetheusefullifeofadepreciableassethasbeenestimatedandtheamounttobedepreciatedeachyearhasbeendetermined,theamountscannotbechanged.ANS:FPTS:1DIF:EasyOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting22.Residualvalueisnotincorporatedintheinitialcalculationsfordouble-declining-balancedepreciation.ANS:TPTS:1DIF:EasyOBJ:10-02NAT:AACSBAnalytic|AICPAFN-Measurement|ACBSP-APC-13-Long-termAssetsReporting23.Thedouble-declining-balancemethodisanaccelerateddepreciationmethod.ANS:TPTS:1DIF