Test_2_CH_9_practice_test_questions

Test_2_CH_9_practice_test_questions - TEST 2 Practice...

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TEST 2 Practice Questions Chapter 9 Version 4 Diane Wright 1. Kevin Company recently purchased a truck. The price negotiated with the dealer was $100,000. Kevin also paid sales tax of $8,000 on the purchase, shipping and preparation costs of $6,000, and insurance for the first year of operation of $3,000. For the truck, what amount should be debited to the asset account vehicles? a. $109,000 b. $100,000 c. $114,000 d. $108,000 e. $106,000 2. If an expenditure is treated as a capital expenditure, instead of as a revenue expenditure, which of the following statements is true? a. The current year’s net income will be lower and future depreciation expense will be lower. b. The current year’s net income will be lower and future depreciation expense will be higher. c. The current year’s net income will be higher and future depreciation expense will be lower. d. The current year’s net income will be higher and future depreciation expense will be higher. 3. Lacrosse Inc., purchased an asset on January 1, 2010. Lacrosse chose the accelerated depreciation method to depreciate the asset. Had Lacrosse chosen the straight-line method a. net income would be less in 2010 b. depreciation expense would be less in 2010 c. the book value of the asset would be less at the end of 2010 d. all of the above are correct
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4. Recording depreciation each period is necessary in accordance with the a. asset valuation principle. b.
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This note was uploaded on 12/05/2011 for the course ACCT 207 taught by Professor Hudchinson during the Fall '08 term at University of Delaware.

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Test_2_CH_9_practice_test_questions - TEST 2 Practice...

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