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CHAPTER 8 INTERNAL CONTROL AND CASH PART 4 MULTIPLE CHOICE QUESTIONS 39. Which one of the following is not an objective of a system of internal controls? a. Safeguard company assets b. Overstate liabilities in order to be conservative c. Enhance the accuracy and reliability of accounting records d. Reduce the risks of errors 40. Internal controls are concerned with a. only manual systems of accounting. b. the extent of government reg ...

Other / Other 05 Nov 2016

CHAPTER 10 PART 8 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS 121. Larime Company purchased equipment for $40,000 on January 1, 2007, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 5-year life and a $2,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2009 will be a. $5,760. b. $9,120. c. $9,600. d. $5,4 ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 9 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS 141. If disposal of a plant asset occurs during the year, depreciation is a. not recorded for the year. b. recorded for the whole year. c. recorded for the fraction of the year to the date of the disposal. d. not recorded if the asset is scrapped. 142. If a fully depreciated plant asset is still used by a company, the a. estimated remaining useful life must be revi ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 6 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS 10 - 12 Test Bank for Accounting Principles, Eighth Edition 79. The book value of an asset is equal to the a. asset's market value less its historical cost. b. blue book value relied on by secondary markets. c. replacement cost of the asset. d. asset's cost less accumulated depreciation. 80. Accountants do not attempt to measure the change in a plant asset's marke ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 3 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS 21. Capital expenditures are expenditures that increase the company's investment in productive facilities. 22. Ordinary repairs should be recognized when incurred as revenue expenditures. 23. A characteristic of capital expenditures is that the expenditures occur frequently during the period of ownership. 24. Once an asset is fully depreciated, no additional deprecia ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 1 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS CHAPTER STUDY OBJECTIVES 1. Describe how the cost principle applies to plant assets. 2. Explain the concept of depreciation. 3. Compute periodic depreciation using different methods. 4. Describe the procedure for revising periodic depreciation. 5. Distinguish between revenue and capital expenditures, and explain the entries for each. 6. Explain how t ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 4 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS 41. Research and development costs which result in a successful product which is patentable are charged to the Patent account. 42. The cost of a patent must be amortized over a 20-year period. 43. The cost of a patent should be amortized over its legal life or useful life, whichever is shorter. 44. The balances of the major classes of plant assets and accumulated dep ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 7 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS 101. Which depreciation method is most frequently used in businesses today? a. Straight-line b. Declining-balance c. Units-of-activity d. Double-declining-balance 102. Wine Company uses the units-of-activity method in computing depreciation. A new plant asset is purchased for $24,000 that will produce an estimated 100,000 units over its useful life. Estimated salv ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 5 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS MULTIPLE CHOICE QUESTIONS : 57. The cost of a purchased building includes all of the following except a. closing costs. b. real estate broker's commission. c. remodeling costs. d. All of these are included. 58. A company purchased land for $90,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land bef ...

Other / Other 04 Nov 2016

CHAPTER 10 PART 10 PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS 161. A coal company invests $16 million in a mine estimated to have 20 million tons of coal and no salvage value. It is expected that the mine will be in operation for 5 years. In the first year, 1,000,000 tons of coal are extracted and sold. What is the depletion expense for the first year? a. $800,000 b. $320,000 c. $80,000 d. Cannot be determined from the infor ...

Other / Other 04 Nov 2016