Ch 101

Ch 101 - Kieso Weygandt Warfield Intermediate 100(16 out of 16 correct Responses t o questions are indicated by the s ymbol 1 Which one of the

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100% (16 out of 16 correct) Responses to questions are indicated by the symbol. 1. Which one of the following is not a characteristic of property, plant, and equipment? A. They are acquired for use in operations. B. They are long-term in nature and are always subject to depreciation. C. They possess physical substance. D. All of the options are characteristics. Land, which is part of property, plant, and equipment, is not depreciated. 2. Land costs include all of the following except: A. closing costs such as attorney's fees. B. assumption of any liens and mortgages. C. special assessments for street lights. D. All of the options are land costs. Land costs include closing costs, assumption of any liens and mortgages, and special assessments. 3. The cost of buildings should include all of the following except: A. building permits. B. excavation costs. C. overhead costs incurred during construction. D. costs of removing an old building on the new building site. The cost of removing an old building is a cost of getting the land ready and relates to the land instead of the new building. 4. Overhead costs related to self-constructed assets are accounted for by: 10/26/2009 Kieso, Weygandt, Warfield: Intermediate… http://bcs.wiley.com/he-bcs/Books?acti… 1/6
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A. allocating overhead on the basis of lost production. B. assigning a portion of all overhead to the asset. C. assigning no fixed overhead to the asset. D. assigning a pro rata portion of fixed overhead to the asset. A pro rata portion of fixed overhead should be assigned to the self-constructed asset because a better matching of costs and revenues results. 5. The approach for interest costs incurred during construction recommended under GAAP is to: A. capitalize no interest charges during construction.
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This note was uploaded on 02/22/2010 for the course ACG 6200 taught by Professor Lorenzo during the Spring '10 term at FIU.

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Ch 101 - Kieso Weygandt Warfield Intermediate 100(16 out of 16 correct Responses t o questions are indicated by the s ymbol 1 Which one of the

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