1. all of the following costs would be included in the land account

1.  All of the following costs would be included in the Land account when land is purchased EXCEPT ________. 

 

A.  costs to prepare the land for use such as removing a tree stump

B.  the costs associated with paving a parking lot on the land

C.  the fee paid to transfer title to the land

D.  the realtor’s fee   

 

2.   Which statement below is true about the cost principle? 

 

A.  The cost principle says that all costs reasonable and necessary to place an asset into a working condition should be capitalized.

B.  The cost principle says that only the cash paid to acquire a long-term asset should be capitalized.

C.  The cost principle says that all costs associated with purchasing a long-term asset should be expensed in the period of the purchase.

D.  The cost principle says that all costs associated, directly or indirectly, with buying and using a long-term asset should be permanently capitalized.  

    

3.  Cranberry Company purchased two pieces of equipment from a Canadian vendor for $400,000. If the assets had been purchased separately, the company would have paid $90,000 for the first piece of equipment and $360,000 for the second piece of equipment. What amount should be recorded for the first piece of equipment?

 

A.   $80,000     

B.  $320,000

C.  $360,000

D.  $90,000  

    

4.  Capitalizing a cost means to record the cost into a(n) ________ account. 

 

A.  expenditure

B.  asset

C.  income statement

D.  contributed capital  

    

5.  On November 1, 2011, Frigate Shipping Company bought equipment that cost $400,000, with an estimated useful life of 8 years and an estimated salvage value of $28,000. The company uses the straight-line method of depreciation and has a fiscal year ending on October 31.  For the year ended October 31, 2012, Frigate Company will report depreciation expense of ________. 

 

A.  $46,500   

B.  $50,000

C.  $33,333

D.  $31,000  

    

6.  Which statement about depreciation is true? 

 

A.  Depreciation means loss in economic value.

B.  Depreciation means to increase net income by transferring balances from shareholders’ equity.

C.  Depreciation refers to an allocation of an asset’s cost to an expense account.

D.  Depreciation means to capitalize a cost over several accounting periods.

  

7.  The adjustment to record the use of long-term assets includes a(n) ________. 

 

A.  increase in total liabilities

B.  decrease in total liabilities

C.  decrease in total shareholders’ equity

D.  increase in total shareholders’ equity  

    

8.  On January 1, 2011, Petrel Shipping Company bought equipment that cost $55,000 with an estimated useful life of 4 years and an estimated salvage value of $5,000. The company uses the straight-line method of depreciation. At what rate will the equipment depreciate in 2011? 

 

A.  25%     

B.  15%

C.  10%

D.  20%  

    

9.  RET Company uses the activity (units-of-production) method to depreciate long-term assets. The company owns a truck that cost $24,000. The truck is estimated to have a salvage value of $2,000 and a useful life of 200,000 miles. How much depreciation expense would be reported on the income statement in a year in which the truck is driven 50,000 miles? 

 

A.  $6,000

B.  $6,500

C.  $5,000

D.  $5,500     

    

10.  A business will have depletion expense only if it has ________.   

 

A.  property, plant, and equipment that are used in operating activities

B.  natural resources like timber and oil

C.  current assets that are consumed during the period

D.  intangible assets like copyrights and trademarks  

    

11.  Which of the following assets should be amortized? 

 

A.  oil reserves

B.  building

C.  timber

D.  patent  

    

12.  Which of the following should be recorded as an expense in the period when the activity takes place?  

 

A.  Rondeaux Company paid $50,000 for the exclusive right to manufacture a product.

B.  ResolCo paid $100,000 to buy a new piece of equipment.

C.  Nationwise, Inc. routinely replaces the wiper blades on its fleet of delivery trucks.

D.  Revel, Inc. paid $10,000 to overhaul and improve a machine to make it last longer.  

    

13.  BFS Company sold an asset for $7,500 in cash. The asset had an historical cost of $30,000 and accumulated depreciation of $20,000 on the day it was sold. How much is the gain or loss on the sale? 

 

A.  $2,500 loss    

B.  $2,500 gain

C.  $10,000 loss

D.  $22,500 gain  

    

14.  A loss is a ________. 

 

A.  reduction in liabilities

B.  decrease in cash related to operating a business

C.  reduction in income that is incurred outside the normal course of business

D.  reduction in an asset’s selling price  

    

15.  On January 1, 2011, Fred McGriff Company bought office computers that cost $43,000, with an estimated useful life of 10 years and an estimated salvage value of $3,000. The company uses the straight-line method of depreciation and has a calendar year end. For the year ended December 31, 2012, McGriff Company will report depreciation expense of ________ on the ________. 

 

A.  $4,000; income statement      

B.  $4,000; statement of cash flows

C.  $4,300; income statement

D.  $4,300; statement of cash flows  

    

16.  WDS Company owns a patent with an estimated useful life of 15 years, a zero salvage value, and a historical cost of $42,000. Net income is $200,000 before the year-end adjustment related to the patent. What will net income be after the proper year-end adjustment has been made? 

 

A.  $202,800

B.  $194,000

C.  $197,200    

D.  $200,000  

    

17.  On January 1, 2011, Petrel Shipping Company bought equipment that cost $65,000 with an estimated useful life of 10 years and an estimated salvage value of $5,000. The company uses the double-declining balance method of depreciation. What will be the BOOK VALUE of the asset on 

December 31, 2012? 

 

A.  $35,600

B.  $38,900

C.  $41,600    

D.  $40,460  

    

18.  Use the following selected information from PDG Corporation to determine the asset turnover ratio for the year.

Beginning total assets    $300,000

Ending total assets     $350,000

Sales revenue      $900,000

Total operating expenses   $800,000

Interest    $15,000

Net income      $85,000 

  

A.  0.31

B.  0.26

C.  0.15

D.  2.77    

 

19.  Use the following selected information from ABC Corporation to determine the asset turnover ratio for the year.

Total revenues    $100,000

Total operating expenses      $65,000

Interest      $6,000

Beginning total assets      $500,000

Ending total assets          $440,000

Ending retained earnings          $300,000 

 

A.  0.75

B.  0.21       

C.  0.17

D.  1.00

  

20.   Which of the following is an example of a physical control over assets?   

 

A.  unlocked storage rooms

B.  the people who have physical custody of assets should be different from the people who maintain the records for those assets

C.  cash register

D.  complete and reliable record-keeping

 

Duepapers
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.