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  • Chapter 7 - Tangible Fixed Assets

    Transféré par

    sablu khan
    53 vues3 pages
    Identify the choice that best completes the statement or answers the question. Depreciation is the systematic allocation of an asset's depreciable cost over its useful life. The book value of an asset will no longer be reported in the balance sheet. When the book value has reached the residual value, the asset is systematically disposed of.

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    Identify the choice that best completes the statement or answers the question. Depreciation is the systematic allocation of an asset's depreciable cost over its useful life. The book value of an asset will no longer be reported in the balance sheet. When the book value has reached the residual value, the asset is systematically disposed of.

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    53 vues3 pages

    Chapter 7 - Tangible Fixed Assets

    Transféré par

    sablu khan
    Identify the choice that best completes the statement or answers the question. Depreciation is the systematic allocation of an asset's depreciable cost over its useful life. The book value of an asset will no longer be reported in the balance sheet. When the book value has reached the residual value, the asset is systematically disposed of.

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    © All Rights Reserved
    Téléchargez comme PDF, TXT ou lisez en ligne sur Scribd
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    Chapter7Tangiblefixedassets
    MultipleChoice
    Identifythechoicethatbestcompletesthestatementoranswersthequestion.

    1.Whatistheprincipalcriterionusedtodistinguishbetweentangibleassetsand
    inventories?
    a. Thephysicalsubstanceoftheasset.
    b. Theacquisitioncostoftheasset.
    c. Thenatureofthecompanysactivity,whichdeterminesthepurposeforwhich
    theassetisheld.
    d. Themomentintheaccountingperiodwhentheassetisacquired.
    ANSWER:C
    Easy
    POINTS: 0/1
    REF:
    page233

    2.Whatistheacquisitioncostofanassetgiventhefollowingitems:
    Purchaseprice100
    Importduties10
    Transportation15
    Installationcost7
    Professionalfees2
    a. 100
    b. 109
    c. 125
    d. 134
    ANSWER:D
    Moderate
    POINTS: 0/1
    REF:
    pages236,237

    3.AccordingtoIAS16,whatisthesystematicallocationofthedepreciable[cost]ofan
    assetoveritsusefullife?
    a. Impairment
    b. Depreciation
    c. Writedown
    d. Writeoff
    ANSWER:B
    Easy
    POINTS: 0/1
    REF:
    page237

    4.Thechoiceoftheappropriatedepreciationmethodshouldbemadesoasto:
    a. Bestreflectthepatternofdeclineintheassetsservicepotential.
    b. Facilitatethecomputationofthedepreciationexpensebytheaccountants.
    c. Reducethedepreciationexpensewhentheenterprisereportsaloss.

    d. Noneoftheabove
    ANSWER:A
    Easy
    POINTS: 0/1
    REF:
    page240

    5.Giventhefollowingdata,whatisthedepreciationexpenseofanassetforthefirstyear?
    Acquisitioncost6000
    Estimatedresidualvalue1000
    Estimatedusefullife5
    DepreciationmethodusedStraightlinemethod
    a. 2000
    b. 1500
    c. 1200
    d. 1000
    ANSWER:D
    Moderate
    POINTS: 0/1
    REF:
    page241

    6.Whathappenswhenthebookvaluehasreachedtheresidualvalue?
    a. Theassetwillnolongerbereportedinthebalancesheet.
    b. Theassetissystematicallydisposedof.
    c. Theassetmightnotbetakenoutofserviceifitisstillreliableandusefuland
    willbecarriedinthebalancesheetforabookvalueequaltotheresidualvalue.
    d. Noneoftheabove
    ANSWER:C
    Moderate
    POINTS: 0/1
    REF:
    page246

    7.Whichofthefollowingentriesismadetorecordthedepreciationexpensefora
    manufacturingasset,inanincomestatementorganizedbynatureofexpenses?
    a.
    b.
    c.
    d.
    ANSWER:B
    Moderate
    POINTS: 0/1
    REF:
    page246

    8.Howaretangibleassets,whichwerecreatedordevelopedinternally,valued?
    a. Attheirreplacementcost
    b. Attheirliquidationcost
    c. Attheirpresentcost
    d. Attheirhistoricalcost
    ANSWER:D

    Easy
    POINTS: 0/1
    REF:
    page248

    9.Whichofthefollowingstatementsisfalse?
    a. Ifthefairmarketvalueofatangibleassetislessthanitsbookvalue,suchasset
    shouldbewrittendownandalossrecognizedasanimpairmentlossexpense.
    b. Inpractice,testsforimpairmentareverydifficulttoimplement.
    c. Animpairmentlosscannotbereversed.
    d. Practiceandregulationregardingimpairmenthavevariedovertimeandbetween
    countriesintheworld.
    ANSWER:C
    Easy
    POINTS: 0/1
    REF:
    page255

    10.Howisdepreciationrecordedwhenanassetissoldduringtheaccountingperiod?
    a. Depreciationmustberecordedforthewholeaccountingperiod.
    b. Depreciationmustberecordedfortheperiodoftimebetweenthedateofthelast
    depreciationentry(endofthepreviousaccountingperiod)andthedateofsale.
    c. Depreciationisnotrecorded.
    d. Noneoftheabove
    ANSWER:B
    Moderate
    POINTS: 0/1
    REF:
    page258

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