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chap011_1 - Chapter 11 Operational Assets Utilization and...

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Chapter 11: Operational Assets: Utilization and Disposition Chapter 11 Test Planner Learning Level 1: Knows terms and facts Learning Level 2: Understands principles and concepts Learning Level 3: Applies principles and concepts Learning Objective 1: Explain the concept of cost allocation as it pertains to operational assets. 1, 2, 3, 19*, 22*, 24*, 25*, 34*, 38*, 43, 44, 46, 48, 50 5, 33*, 47, 115, 116, 117, 121, 122 107 , 108 Learning Objective 2: Determine periodic depreciation using both time-based and activity- based methods. 6, 7, 8, 11, 14*, 15*, 16*, 17*, 28*, 29*, 35*, 36*, 37* 4, 45, 52, 74 , 118, 119 58, 59, 60, 61, 62, 63, 66, 67, 68, 69, 70, 71, 72, 73, 75, 76, 77, 78, 79, 82, 84, 85, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 106, 109 Learning Objective 3: Calculate the periodic depletion of a natural resource. 10, 18*, 23* 114 64, 65, 100, 101 Learning Objective 4: Calculate the periodic amortization of an intangible asset. 27*, 51 40* 83 Learning Objective 5: Explain the appropriate accounting treatment required when a change is made in the service life or residual value of an operational asset. 12, 32*, 49 9 86 , 98, 99 Learning Objective 6: Explain the appropriate accounting treatment required when a change in depreciation method is made. 26* 120 80 , 102, 103 Learning Objective 7: Explain the appropriate accounting treatment when an error in accounting for an operational asset is discovered. 31* 115 81 , 104 Learning Objective 8: Identify situations that involve a significant impairment of the value of operational assets and describe the required accounting procedures. 13*, 41*, 53, 54, 55 123, 124, 125 110, 111, 112, 113 Learning Objective 9: Discuss the accounting treatment of repairs and maintenance, additions, improvements, and rearrangements to operational assets. 20*, 21*, 30*, 39* 42*, 56, 57 105 Key for Test Planner Question Number Coding: T/F   Matching*    MC    Problems    Essay Spiceland/Sepe/Tomassini Page 1
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Chapter 11: Operational Assets: Utilization and Disposition True/False Questions 1. T F The three factors in cost allocation of a depreciable asset are service life, the allocation base, and the allocation method. Answer: True 2. T F The physical life of a depreciable asset sets the lower limit of its service life. Answer: False 3. T F Any method of depreciation must be both systematic and rational. Answer: True 4. T F Advocates of accelerated depreciation methods argue that their use tends to level out the total cost of ownership of an asset over its benefit period if one considers both depreciation and repair and maintenance costs. Answer: True 5. T F Total depreciation is the same over the life of an asset regardless of the method of depreciation used. Answer: True 6. T F Activity-based methods of depreciation are appropriate for assets whose service life is a function of use rather than time. Answer: True 7. T F Once selected for existing assets, a company must consistently use the same method of depreciation for all subsequent fixed asset acquisitions.
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