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Chapter 9 Acct Notes Quiz
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Multiple Choice Questions
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The journal entry for recording payment for the short-term lease of a fixed asset would
0%
double-declining-balance
0%
capital expenditures
0%
debit Rent Expense and credit Cash
0%
Initial cost - Residual value
Fixed assets are ordinarily presented on the balance sheet
0%
$1,500($41,000-$36,500)-$3,000= $1,500
0%
current operating expenses
0%
at cost less accumulated depreciation
0%
debit Rent Expense and credit Cash
A machine with a cost of $75,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. What is the amount of depreciation for the second full year, using the double-declining-balance method?
0%
$16,000
0%
$60,000
0%
$160,000($40,000+$45,000+$75,000)= $160,000
0%
$18,750
If a fixed asset, such as a computer, were purchased on January 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is
0%
Dr:Depreciation Expense 100 Cr:Accumulated Depreciation 100
0%
$1,500($41,000-$36,500)-$3,000= $1,500
0%
Dr:Accumulated DepreciationCr:Machinery
0%
$12,500 partial means =(january-may)($90,000/3) x (5/12)
The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is
0%
amortization
0%
double-declining-balance
0%
straight-line
0%
depletion
Which of the following are criteria for determining whether to record an asset as a fixed asset?
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-All of these choices are correct. (testing costs prior to placing the equipment into production, installation costs, and transportation costs)
0%
units produced(needs estimated life, cost, and residual value)
0%
estimated at the time that the asset is placed in service
0%
must be long lived and used by the company in its normal operations
Accumulated Depreciation
0%
an asset account
0%
current operating expenses
0%
is a contra asset account
0%
Initial cost - Residual value
The depreciation method that does not use residual value in calculating the first year's depreciation expense is
0%
debit Rent Expense and credit Cash
0%
capital expenditures
0%
double-declining-balance
0%
depletion
The most widely used depreciation method is
0%
an asset account
0%
straight-line
0%
Initial cost - Residual value
0%
amortization
A capital expenditure results in a debit to
0%
is a contra asset account
0%
straight-line
0%
residual value
0%
an asset account
The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called
0%
Dr:Accumulated DepreciationCr:Machinery
0%
amortization
0%
depletion
0%
double-declining-balance
Which of the following should be included in the acquisition cost of a piece of equipment?
0%
debit Rent Expense and credit Cash
0%
brokerage commission
0%
-All of these choices are correct. (testing costs prior to placing the equipment into production, installation costs, and transportation costs)
0%
at cost less accumulated depreciation
On June 1, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours.Using straight-line depreciation, calculate depreciation expense for the final (partial) year of service.
0%
$12,500 partial means =(january-may)($90,000/3) x (5/12)
0%
Dr:Depreciation Expense 100 Cr:Accumulated Depreciation 100
0%
$17,500 (june-december)($90,000/3) x (7/12))
0%
$160,000($40,000+$45,000+$75,000)= $160,000
A fixed asset's estimated value at the time it is to be retired form service is called
0%
$60,000
0%
capital expenditures
0%
at cost less accumulated depreciation
0%
residual value
Expenditures for research and development are generally recorded as
0%
brokerage commission
0%
current operating expenses
0%
capital expenditures
0%
at cost less accumulated depreciation
Which of the following is included in the cost of land?
0%
-All of these choices are correct. (testing costs prior to placing the equipment into production, installation costs, and transportation costs)
0%
brokerage commission
0%
current operating expenses
0%
capital expenditures
The formula for depreciable cost is
0%
at cost less accumulated depreciation
0%
is a contra asset account
0%
Initial cost - Residual value
0%
debit Rent Expense and credit Cash
Expenditures that add to the utility of fixed assets for more than one accounting period are
0%
current operating expenses
0%
capital expenditures
0%
debit Rent Expense and credit Cash
0%
double-declining-balance
A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $3,000, would have a cost basis o
0%
$160,000($40,000+$45,000+$75,000)= $160,000
0%
$19,000(($220,000-$30,000)/10)= $19,000
0%
$93,000$77,000+$8,000+$5,000+$3,000= $93,000
0%
$1,500($41,000-$36,500)-$3,000= $1,500
A building with an appraisal value of $154,000 is made available at an offer price of $172,The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,The cost basis recorded in the buyer's accounting records to recognize this purchase is
0%
$160,000($40,000+$45,000+$75,000)= $160,000
0%
$19,000(($220,000-$30,000)/10)= $19,000
0%
$1,500($41,000-$36,500)-$3,000= $1,500
0%
$93,000$77,000+$8,000+$5,000+$3,000= $93,000
All of the following are needed for the calculation of straight-line depreciation except
0%
estimated at the time that the asset is placed in service
0%
-All of these choices are correct. (testing costs prior to placing the equipment into production, installation costs, and transportation costs)
0%
units produced(needs estimated life, cost, and residual value)
0%
must be long lived and used by the company in its normal operations
Equipment with a cost of $160,000, an estimated residual value of $40,000, and an estimated life of 15 years was depreciated by the straight-line method for 4 years. Due to obsolescence, it was determined that the useful life should be shortened by 3 years and the residual value changed to zero. The depreciation expense for the current and future years is
0%
$60,000
0%
$18,750
0%
$16,000
0%
$19,000(($220,000-$30,000)/10)= $19,000
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