ch10 - ch10 Student 1 2 3 Property plant and equipment and...

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ch10 Student: ___________________________________________________________________________ 1. Property, plant, and equipment and intangible assets are long-term, revenue producing assets. True False 2. Sales tax paid on equipment acquired for use in the business is not capitalized. True False 3. Demolition costs to remove an old building from land purchased as a site for a new building are considered part of the cost of the new building. True False 4. The initial cost of property, plant, and equipment includes all the identifiable expenditures necessary to bring the asset to its desired condition and location for use. True False 5. A distinguishing characteristic of intangible assets is the degree of uncertainty about when or if they will provide future benefits. True False 6. Costs incurred after discovery of a natural resource but before production begins are reported as expenses of the period in which the expenditures are made. True False 7. The relative fair values are used to determine the valuation of individual assets acquired in a lump-sum purchase. True False 8. The fair value of the asset, debt or equity securities given in a noncash acquisition should determine the value of the consideration received. True False 9. Under current GAAP, fair value is used to measure the components of all nonmonetary exchanges. True False 10. The capitalization period for a self-constructed asset ends either when the asset is substantially complete and ready for use or when interest costs no longer are being incurred. True False 11. The FASB's required accounting treatment for research and development costs often understates both net income and assets. True False 12. According to International Financial Reporting Standards, all research and development expenditures are expensed in the period incurred. True False 13. A company that prepares its financial statements according to International Financial Reporting Standards must calculate amortization of capitalized software development costs in the same way as under U.S. GAAP. True False 14. The successful efforts method of accounting for oil and gas exploration costs allows costs incurred in searching for oil and gas within a large geographical area to be capitalized. True False
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15. Match each phrase with the correct term placing the letter designating the best term in the space provided by the phrase. 1. Interest cost Account credited when assets are donated to a corporation. __ __ 2. Franchise Approximation of average outstanding debt if all construction funds were borrowed. __ __ 3. Exchange of nonmonetary assets Both the total amount and the amount capitalized should be disclosed.
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This note was uploaded on 04/12/2011 for the course ACCT 201 taught by Professor Hyduke,n during the Spring '10 term at Community College of Baltimore County.

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ch10 - ch10 Student 1 2 3 Property plant and equipment and...

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