Chapter 10

Chapter 10 - AdditionalSelfTest,Question1 Correct.

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Additional Self Test, Question 1
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Correct.      The cost of driveways, walks, and parking lots are included in the cost of land. True False Additional Self Test, Question 2 Correct.      Interest revenue earned on borrowed funds during the construction of an asset to be used by a firm can be used to reduce  the cost of interest to be capitalized. False True Additional Self Test, Question 3 Correct.      When nonmonetary assets are traded in an exchange that lacks commercial substance and no cash is received, any loss is  recognized immediately. True False Additional Self Test, Question 4 Correct.     
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The receipt of an asset from a contribution should be recorded as additional paid-in capital. True False Additional Self Test, Question 5 Correct.      The cost of a replacement that extends the useful life of an asset should be debited to the asset account. False True Additional Self Test, Question 6 Correct.      Land is only depreciated if it suffers a material decrease in value. True False Additional Self Test, Question 7 Correct.      A portion of fixed overhead incurred during self-construction of an asset must be allocated to the construction process. True
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False Additional Self Test, Question 8 Correct.      Avoidable interest is the amount of interest cost incurred during the construction period that a company could theoretically  avoid if it had not made expenditures for the asset. True False Additional Self Test, Question 9 Correct.      If an exchange has commercial substance losses should be recognized immediately and gains should be deferred. False True Additional Self Test, Question 10 Correct.      Cash or other assets received in an exchange are referred to as “boot.” True False Additional Self Test, Question 11
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Correct.      Under iGAAP, historical cost is the preferred treatment for property, plant, and equipment. False True Additional Self Test, Question 12 Correct.      The only major characteristic of property, plant and equipment shown below is: they lack physical substance. they are acquired for resale. they are always subject to depreciation. they are long-term in nature. Additional Self Test, Question 13 Correct.      The cost of equipment includes: purchase price less any discounts.
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freight charges. cost of conducting trial runs. All of the above. Correct Additional Self Test,  Question 14 Special assessments for local improvements, such as pavements, street lights, sewers, and drainage systems, are usually  charged to what account? Building Improvements.
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This note was uploaded on 07/27/2011 for the course ACCT 304 taught by Professor Hendren during the Summer '08 term at Strayer.

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Chapter 10 - AdditionalSelfTest,Question1 Correct.

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