Chapter 9 - Amortization Exam Study Questions With Complete Answers.
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Course
AMORTIZATION
Institution
AMORTIZATION
4 categories of long-lived assets: - correct answer land, land improvements, buildings, equipment`
Three characteristics: - correct answer physical substance, used in operations, not for sale to customers
Operating expe...
4 categories of long-lived assets: - correct answer land, land improvements,
buildings, equipment`
Three characteristics: - correct answer physical substance, used in operations, not
for sale to customers
Operating expenditures: are/and on the journal are - correct answer costs incurred
that only benefit the current period/expensed
Capital expenditures: def/are included in - correct answer costs incurred that will
benefit future periods/long-term asset account
Land cost includes: (3) - correct answer purchase price, closing costs/legal fees,
extra costs
Land improvements are/and are recorded - correct answer structural additions to
land/separately from land and amortized
Buildings: include (3) - correct answer purchase price, legal fees, costs of preparing
and interest
Equipment: includes (4) - correct answer purchase price, freight charges, insurance,
and cost of assembly
Equipment operating expenses: 2 examples - correct answer motor vehicle licenses,
insurance on trucks
Basket Purchase: def - correct answer when property, plant, and equipment are all
purchased together for a single price
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