In addition the appraised value doesnt necessarily indicate the lands market

In addition the appraised value doesnt necessarily

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In addition, the appraised value doesn't necessarily indicate the land's market value. AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting, Measurement Bloom's: Apply Difficulty: Medium Learning Objective: 08-02 Apply the cost principle to measure the acquisition and maintenance of property; plant; and equipment. Topic Area: Acquisition And Maintenance Of Plant And Equipment 52. Which of the following statements is incorrect? A. Replacement of a truck's tires would be treated as a capital expenditure. B. The cost of replacing carpet in a building would be a revenue expenditure. C. Cost of replacing a roof on a newly purchased building before using it as a store would be a capital expenditure. D. The cost of repainting a hallway would be a revenue expenditure. Replacing the tires would be considered ordinary maintenance and repairs and is considered to be a revenue expenditure. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Bloom's: Understand Difficulty: Medium Learning Objective: 08-02 Apply the cost principle to measure the acquisition and maintenance of property; plant; and equipment. Topic Area: Acquisition And Maintenance Of Plant And Equipment 8-58
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Chapter 08 - Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles 53. Gilbert Company made an ordinary repair to a delivery truck during 2010 at a cost of $500 and capitalized the repair cost. What will be the effect on the 2010 financial statements as a result of the capitalization? A. The financial statements aren't affected. B. Assets and net income are both overstated. C. Assets are overstated and net income was understated. D. Assets and stockholders' equity are both understated. The repair should have been expensed during 2010 rather than be capitalized. As a result, net income is overstated because expenses are understated; assets are overstated because of the capitalization. AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting, Measurement Bloom's: Analyze Difficulty: Hard Learning Objective: 08-02 Apply the cost principle to measure the acquisition and maintenance of property; plant; and equipment. Topic Area: Acquisition And Maintenance Of Plant And Equipment 54. Which of the following would most likely not be a revenue expenditure? A. Repairing the carpet in the sales department offices. B. Repairing a leaky roof. C. Putting a hydraulic lift on a delivery truck making it easier and quicker to deliver appliances. D. Painting the exterior of the factory building. The hydraulic lift would be considered a capital expenditure since the lift increases the truck's operating efficiency. AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Bloom's: Remember Difficulty: Medium Learning Objective: 08-02 Apply the cost principle to measure the acquisition and maintenance of property; plant; and equipment.
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