Exam 9: Reporting and Interpreting Long-Lived Tangible and Intangible Assets

A) fixed assets, inventory, cost of goods sold
B) goods available to sell, inventory, a loss
C) inventory, revenue, cost of goods sold
D) fixed assets, revenue, cost of goods sold

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A) $158,625 and $141,000
B) $141,000 and $158,625
C) $126,900 and $176,250
D) $126,900 and $158,625

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A) Depreciation allocates the cost of tangible assets over their useful lives.
B) Depreciation allocates the cost of intangible assets over their useful lives.
C) Amortization allocates the cost of tangible assets over their useful lives.
D) The term "depreciation" relates to all long-lived assets whereas "amortization" relates only to intangible assets.

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A) is not amortized, but is tested annually for impairment.
B) is amortized using the straight-line method.
C) is amortized using the units-of-production method.
D) is not amortized and is not tested for impairment.

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A) $102,000
B) $198,000
C) $204,000
D) $206,000

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A) Amortization of intangible assets is always recorded in a contra asset account.
B) Items in a company's inventory that are not expected to be sold in the next year are considered long-lived assets.
C) All long-lived intangible assets must be amortized over a period of 40 years or less.
D) Intangible assets with unlimited or indefinite lives are not amortized.

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A) $9,000.
B) $3,750.
C) $7,500.
D) $15,000.

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A) in the Operating Revenues section of the income statement.
B) in the Operating Expenses section of the income statement.
C) as a direct increase to the asset account on the balance sheet.
D) as a direct decrease to the asset account on the balance sheet.

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A) Land on which a new store is located
B) Land purchased for resale next month
C) Cash
D) Retained earnings

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A) a basket purchase.
B) not required by GAAP.
C) not required by IFRS.
D) depreciation.

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A) Debit Cash for $250,000, debit Notes Payable for $250,000, and credit Equipment for $500,000
B) Debit Equipment for $500,000, credit Cash for $250,000, and credit Notes Payable for $250,000
C) Debit cash for $250,000, debit Notes Payable for $250,000, credit Equipment for $450,000, and credit Operating Expenses for $50,000
D) Debit Equipment for $450,000, debit Operating Expenses for $50,000, credit cash for $250,000, and credit Notes Payable for $250,000

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A) $1,333
B) $1,000
C) $4,000
D) $1,533

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A) Go back and revise all previous years' depreciation expense to be $8,000 per year.
B) Revise the depreciation expense to be $9,000 for years three through six.
C) Continue to depreciate the bar at $6,000 per year and then show a loss when it removes the bar at the end of year six.
D) Disclose the new information in the notes to the financial statements, but do not change anything else.

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A) number of sales dollars generated by each dollar of total assets.
B) rate at which inventories are being rotated.
C) number of dollars in notes payable generated by each dollar in fixed assets.
D) number of sales dollars generated by each dollar of fixed assets.

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A) Depreciation Expense
B) Accumulated Depreciation
C) Machinery
D) Cash

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A) Straight-line
B) Units-of-production
C) Double-declining balance
D) MACRS

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