Question Details

Natural resources are frequently referred to as wasting assets 



1.	A high return on assets indicates
		a.	a profitable company.
		b.	the amount of sales generated by each dollar invested in total assets.
		c.	new assets need to be purchased.
		d.	the company may be in financial difficulty.

2.	For the year ended December 31, 2001, Inko Co. has net assets of $1,000,000 and net income of $290,000. Total assets on January 1, 2001 were $1,750,000 and total assets at December 31, 2001 are $1,245,000. Inko- return on assets for 2001 is
		a.	.57.
		b.	16.6%.
		c.	23.3%.
		d.	19.37%.

	3.	Lief Company's delivery truck, which originally cost $28,000, was destroyed by fire.  At the time of the fire, the balance of the Accumulated Amortization account amounted to $19,000. The company received $16,000 reimbursement from its insurance company.  The gain or loss as a result of the fire was
		a.	$12,000 loss.
		b.	$7,000 loss.
		c.	$12,000 gain.
		d.	$7,000 gain.

	
4.	Natural resources are frequently referred to as wasting assets because
		a.	they are worthless.
		b.	they are physically extracted in operations and are replaceable only by an act of nature.
		c.	there is a lot of inefficiency in their use in operations.
		d.	there is a lot of spoilage when they are extracted.

	5.	According to the matching principle, future removal and site restoration costs must be
		a.	expensed as incurred.
		b.	estimated in advance and allocated over the useful life of the natural resource.
		c.	estimated in advance and expensed completely in the year of acquisition of the related natural resource.
		d.	expensed in the final year of operations.




Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help