accounting-The term applied to the periodic transfer of a plant asset’s cost

QUESTION

Last set of questions!!Question 1.1.The term applied to the periodic transfer of a plant asset’s cost to expense is_______. (Points : 1) amortization depreciation depletion capitalizationQuestion 2.2.A characteristic of a plant asset is that it_______. (Points : 1) is used in the production of income for a business is available for resale to customers in the ordinary course of business lacks physical form both a and b are correctQuestion 3.3.Erosion Tech manufactures erosion control products. In 20X5, they purchased a straw mat machine from Germany. They had the following costs associated with the machine: Price of straw mat machine$450,000Discounts received$9000Travel cost from German to the U.S.$40,000Insurance on equipment while en route$3,000Insurance on equipment while in operation$2,000Installation costs$20,000Property taxes assessed on machine during the second year of operation$4120 What amount should be recorded as the capitalized cost of the equipment? (Points : 1) $504,000 $493,000 $510,120 $495,000Question 4.4.Which of the following accounting methods is the method used to compute depletion? (Points : 1) Straight-line Declining-balance Units-of-production capitalizationQuestion 5.5.When the amount of use of a plant asset varies from year to year, the method of determining depreciation that matches revenues and expenses would be the_______. (Points : 1) straight-line method double-declining balance method units-of-production method either straight-line method or the double-declining balance methodQuestion 6.6.Accumulated depreciation_______. (Points : 1) is a contra liability account is an expense account is a contra asset account is a contra equity accountQuestion 7.7.The double-declining-balance method will provide the greatest tax advantage during the first year of an asset’s life because it yields the ________ compared to the use of other depreciation methods. (Points : 1) highest net income lowest net income highest gross profit lowest operating expensesQuestion 8.8.To measure depreciation for a plant asset, all of the following must be known except_______. (Points : 1) estimated useful life historical cost current market value estimated residual valueQuestion 9.9.Primm Industrial Contractors purchased a new truck on January 1st for $35,000. The truck is expected to have a useful life of five years with a salvage value of $4,500. It is estimated that the truck will be able to operate for 200,000 miles. In year one, Primm Industrial Contractors put 46,000 miles on the truck. What amount should be recorded in year two for depreciation expense if the double-declining-balance method is used? (Points : 1) $14,000 $12,200 $ 8,400 $9,120Question 10.10.Which of the following would be expensed rather than capitalized? (Points : 1) Oil change and lubrication Major engine overhaul Modification for new use Addition to storage capacityQuestion 11.11.A patent would be an example of a(n) ________. (Points : 1) real asset tangible asset natural resource intangible assetQuestion 12.12.Which of the following is the expected cash value of an asset at the end of its useful life? (Points : 1) Book value Residual value Carrying value Market valueQuestion 13.13.On February 1st, the Heathman Company purchased 275 acres of land with timber. The timber was valued at approximately $365,000 with no residual value. The Heathman Company clear-cut 25 acres on August 9th that sold for $2,000 an acre. What should the Heathman Company report as the value of natural resources net of accumulated depletion at year-end? (Points : 1) $331,819 $315,000 $33,181 $50,000Question 14.14.In 2011, a company’s accountant expenses a payment that should be recorded as equipment. In 2012, which of the following is TRUE? (Points : 1) Assets are overstated. Revenue is overstated. Liabilities are overstated. Expenses are understated.Question 15.15.Which of the following isNOTdefined as an intangible asset under international financial reporting standards? (Points : 1) goodwill leaseholds patents research and development costs

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