Which one of the following characteristics is not

Question: 6
Which one of the following characteristics is not required for an asset to be properly described as
property, plant, and equipment?
A. Held for use and not for investment.
B. Newly purchased.
Answer (B) is correct .
These assets are known variously as property, plant, and equipment; fixed assets; or plant assets.
1. PPE are tangible. They have physical existence.
2. PPE may be either personal property (something movable, e.g., equipment) or real
property (such as land or a building).
3. PPE are used in the ordinary operations of an entity and are not held primarily for
investment, resale, or inclusion in another product. But they are often sold.
4. PPE are noncurrent. They are not expected to be used up within 1 year or the normal
operating cycle of the business, whichever is longer.
However, an asset need not be newly purchased to be properly described as property, plant, and
equipment.
C. Expected life of more than 1 year.

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D. Tangible.
Question: 7
Equipment bought by a company 3 years ago was charged to equipment expense in error. The cost of
the equipment was $100,000, with no expected salvage value and a 10-year estimated life. The company uses the
straight-line depreciation method on similar equipment. The error was discovered at the end of Year 3 prior to the
issuance of the company’s financial statements. After correction of the error, the correct carrying value of the
equipment will be
Question: 8
A company uses the sum-of-the-years’-digits (SYD) method of depreciation. On January 1, the
company purchased a machine for $50,000. It had an estimated life of 5 years and no residual value. Depreciation
for the first year would be