To record a long-term asset, you must _____ the general ledger account correct answers Debit
The proper accounting treatment of research and
development costs to develop a patent is to correct answers expense the cost as incurred
A tractor held by a farm equipment company for
sale to farmer...
MGMT 200 || QUESTIONS WITH VERIFIED
SOLUTIONS
To record a long-term asset, you must _____ the general ledger account correct answers
Debit
The proper accounting treatment of research and
development costs to develop a patent is to correct answers expense the cost as incurred
A tractor held by a farm equipment company for
sale to farmers is classified as a long-term asset. correct answers False
Which of the following would not be considered a
long-term asset?
A. the cost of a new piece of
equipment
B. a new addition to a building
C. a complete overhaul of an air conditioning
system
D. painting a building correct answers D. Painting a buiding
It is necessary to distinguish between long-term
asset and a repair expenditures because of
which of the following accounting rules or
principles? correct answers Matching
The term "plant" used in describing long-term
assets refers to correct answers a building
Long-term tangible assets are generally
classified as property, plant, and equipment
on a balance sheet. correct answers True
Customer lists, goodwill and licenses are
classified as correct answers Intangibles
When a company can prove it is worth more
than its balance sheet indicates, it may record
some goodwill. correct answers False
According to generally accepted accounting
principles, goodwill is recorded as an asset correct answers When it is paid for as part of the
purchase of a business
A building not currently used should be classified
as property, plant, and equipment. correct answers False
Under generally accepted accounting principles,
property, plant and equipment is stated at
, _________ on the balance sheet. correct answers Historical Cost
The cost of tearing down a building on land just
purchased in preparation to construct a new
building should be recorded to a(n) correct answers Land account
Land and a building on the land are purchased
for $1,000,000. The appraised values of the land
and building are $500,000 and $1,500,000,
respectively. The cost allocated to the land
should be correct answers $250,000
The cost of equipment would include the cost of
test runs to see that the equipment is operating
properly. correct answers True
Land and a building on the land are purchased
for $100,000. The appraised values of the land
and building are $25,000 and $100,000,
respectively. The cost allocated to the land
should be correct answers $20,000
Which of the following is not a characteristic of all
long-term assets?
A. Possess physical substance
B. Not for resale
C. Used in operations of business
D. Useful life of more than a year correct answers A. Possess physical substance
Which of the following would not be recorded to the
machinery general ledger account?
A. Installation costs
B. Electricity used by the machine
C. Freight delivery charges in purchasing
the machine
D. Cost of trial runs correct answers B. Electricity used by the machine
Which of the following is not a characteristic of
an repair expense?
A. An expense of the current period.
B. Periodic in nature.
C. Necessary to maintain the asset in
good operational condition.
D. Extends the useful life or
increases the residual value of the
asset. correct answers D. Extends the useful or increases the residual value of the asset.
The cost of assets acquired for a lump sum should
be apportioned between the acquired assets
A. True
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