Term
| Other descriptive titles for fixed assets would include |
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Definition
| both plant assets and property, plant, and equipment |
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Term
| a capital expenditure would appear on the |
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Definition
| balance sheet under fixed assets |
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Term
| if a capital expenditure is treated as a revenue expenditure, then |
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Definition
| expenses are overstated and owners' equity is understated |
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Term
| if a revenue expenditure is treated as a capital expenditure, then |
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Definition
| expenses are understated and owners' equity is overstated |
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Term
| which of the following expenditures would NOT be included in the cost of an asset? |
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Definition
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Term
| a company acquired some land for $80,000 to construct a new office complex. legal fees paid were $2,300, delinquent taxes assumed were $3,400 and $5,850 was paid to remove an old building from which salvaged materials sold for $1,950. What is the cost basis for the land? |
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Definition
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Term
| all amounts paid to get an asset in place and ready for use are referred to as |
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Definition
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Term
| the removal of an old building to make the land ready for its intended use is charged to |
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Definition
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Term
| expenditures that add to the utility of fixed assets for more than one accounting period are |
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Definition
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Term
| which of the following should be included in the acquisition of a piece of equipment? |
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Definition
| transportation costs, installation costs, testing costs prior to placing the equipment into production - ALL of these! |
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Term
| which of the following is an example of a capital expenditure? |
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Definition
| replacing an engine in a company car |
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Term
| land improvements include |
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Definition
| fences, trees and shrubs, outdoor lighting - ALL of the above!! |
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Term
| which of the following is NOT a fixed asset? |
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Definition
|
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Term
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Definition
| cost less accumulated depreciation |
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Term
| what type of depreciation occurs when an asset can no longer provide services at the level originally intended? |
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Definition
|
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Term
| salvage value has a similar meaning as |
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Definition
| both residual value and scrap value |
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Term
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Definition
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Term
| which of the following is NOT characteristic of the accumulated depreciation account? |
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Definition
| accumulated depreciation represents cash reserved for asset replacement |
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Term
| which method of depreciation considers residual value in computing the normal periodic depreciation? |
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Definition
|
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Term
| the accounting term depreciation measures |
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Definition
| the amount of asset cost allocated to expense over periods benefited |
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Term
| accelerated depreciation is primarily used for |
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Definition
|
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Term
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Definition
| decreases net income and has no effect on cash flows |
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Term
| to measure depreciation, all of the following must be known EXCEPT |
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Definition
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Term
| a machine was purchased for $60,000. it has a useful life of 5 years and a residual value of $6,000. under the straight-line method, what is annual depreciation expense? |
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Definition
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Term
| equipment was purchased for $18,000. it has a useful life of 5 years and a residual value of $2,000. what is depreciatoin expense for year one under the double-declining-balance method? |
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Definition
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Term
| computer equipment was acquired at the beginning of the year at a cost of $56,000 with an estimated residual value of $5,000 and an estimated useful life of 5 years. determine the second year's depreciation using straight-line depreciation. |
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Definition
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Term
| equipment was purchased for $30,000. it has a useful life of 5 years and a residual value of $4,000. what is depreciation expense for year two under the double-declining balance method? |
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Definition
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Term
| on september 1, a machine with a useful life of 8 years and a residual value of $3,000 was purchased for $47,000. what is depreciation expense in the year of purchase under straight-line depreciation assuming a december 31 year-end? |
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Definition
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Term
| a machine with a useful life of 10 years and a residual value of $4,000 was purchased for $30,000. what is annual depreciation under the straight-line method? |
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Definition
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Term
| if a fixed asset with an original cost of $18,000 and accumulated depreciation of $2,000 is sold for $15,000, the company must |
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Definition
| recognize a loss on the income statement under other expenses |
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Term
| if a fixed asset is sold and the book value is less than cash received, the company must |
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Definition
| recognize a gain on the income statement under other revenues |
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Term
| a fixed asset with a cost of $30,000 and accumulated depreciation of $25,000 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset? |
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Definition
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Term
| a gain is recorded on the sale of fixed assets when |
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Definition
| the asset's book value is less than the cash received |
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Term
| a fully depreciated asset must be |
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Definition
| kept on the books until sold or discarded |
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Term
| a company sold a delivery truck for $18,000 cash. the truck cost $47,500 and had accumulated depreciation of $36,000 as of the date of sale. the entry to record the sale would include |
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Definition
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Term
| a company sold office furniture costing $16,500 with accumulated depreciation of $14,000 for $1,800 cash. the entry to record the sale would include |
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Definition
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Term
| a company purchased an oil well for $25 million with a residual value of $500,000. it is estimated that 10 million barrels can be extracted from the well. determine depletion expense assuming 3 million barrels are extracted and sold. |
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Definition
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Term
| the process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called |
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Definition
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Term
| the drilling company purchased a mining site for $500,000 on July 1, 2010. the company expects to mine ore for the next 10 years and anticipates that a total of 100,000 tons will be recovered. the estimated residual value of the property is $80,000. during 2010 the company extracted 6,500 tons of ore. the depletion expense for 2010 is |
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Definition
|
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Term
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Definition
| only written down if an impairment in value occurs |
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Term
| which of the following is NOT an intangible asset? |
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Definition
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Term
| which intangible assets are amortized over their useful life? |
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Definition
|
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Term
| intangible assets are used in operations but |
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Definition
|
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Term
| the exclusive right to use a certain name or symbol is called a |
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Definition
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Term
| NBC company purchased a patent from ABC for $144,000. At the time of purchase the patent had been in existence for 10 years. what is the first year's amortization? |
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Definition
|
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Term
| expenditures for research and development are generally recorded as |
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Definition
| current operating expenses |
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Term
| the cost of a patent should be amortized |
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Definition
| over 20 years or its economic life, whichever is shorter |
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Term
| a patent was purchased for $670,000 with a legal life of 20 years. Management estimates that the patent has an 12 year economic life. the entry to record amortization would include |
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Definition
| a decrease in patent for $55,833 |
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Term
| fixed assets are ordinarily presented in the balance sheet |
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Definition
| at cost less accumulated depreciation |
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