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Question 1 of 20
5.0 Points

The depreciation method that bases the expense on the level of use instead of the passage of time is __________.

  A. units-of-production
  B. straight-line
  C. modified accelerated cost recovery
  D. double-declining-balance
A manufacturer or seller of a product may identify its merchandise and bar others from using the same identification by getting a __________.
Question 2 of 20

  A. franchise
  B. trademark
  C. patent
  D. copyright
Question 3 of 20
5.0 Points
Which of the following is a non-depreciable asset?  
  A. desk chairs
  B. land
  C. computer
  D. building

Question 4 of 20 5.0 Points
Which depreciation method does not deduct residual value when computing depreciation expense? 
  A. units-of-production
  B. straight-line
  C. double-declining-balance
  D. both A and B
Question 5 of 20
5.0 Points
The cost of a plant asset was increased for the payment of this year's insurance premium. This error would cause __________. 
  A. the period's net income to be overstated
  B. the period's net income to be understated
  C. the period's end assets to be understated
  D. none of the above


Question 6 of 20 5.0 Points
When calculating declining balance depreciation, the straight-line rate was used instead of double the straight-line rate. In the first year of ownership, this error would cause __________.
  A. the period's depreciation expense to be overstated
  B. the period's depreciation expense to be understated
  C. the period end assets to be understated
  D. none of the above

Question 7 of 20 5.0 Points
Chocolate Supreme purchased new baking equipment for $15,000 subject to terms 4/10, n/45. The discount was taken. Additional costs included $900 in sales tax and $300 for installation. The total cost to be added to the machinery account is __________.
  A. $15,900
  B. $15,300
  C. $15,000
  D. $15,600

Question 8 of 20 5.0 Points
A depreciation method that allocates depreciation of a plant asset based on the Tax Act of 1989 is the __________.
  A. straight-line method
  B. units-of-production method
  C. modified accelerated cost recovery method
  D. double-declining-balance method

Question 9 of 20 5.0 Points
Under MACRS, the salvage value is __________.
  A. added to the straight-line depreciation
  B. subtracted from the cost of the asset
  C. ignored
  D. added to the cost of the ass

Question 10 of 20 5.0 Points
Amortization of a patent was ignored. This error would cause __________.
  A. the period's net income to be overstated
  B. the period's net income to be understated
  C. the period end assets to be understated
  D. none of the above
Question 11 of 20 5.0 Points
Intellectual property assets are __________.
  A. depreciated
  B. depleted
  C. amortized
  D. expensed

Question 12 of 20 5.0 Points
A tractor costing $80,000 is depreciated using MACRS. The tractor qualifies as a three-year property and has a scrap value of $20,000. The depreciation rates are: 

Year 1: 33.33%
Year 2: 44.45%
Year 3: 14.81%
Year 4: 7.41%

What is the depreciation expense for Year 2?
  A. $44,450
  B. $35,560
  C. $26,670
  D. $20,000

Question 13 of 20 5.0 Points
According to the MACRS tax rate table, which of the following classes uses straight-line depreciation?
  A. residential rental property
  B. automobiles
  C. railroad tracks
  D. race horses

Question 14 of 20 5.0 Points
Which of the following is an example of a land improvement?
  A. shrubbery
  B. fence
  C. driveway
  D. all of the above

Question 15 of 20 5.0 Points
All of the following are intangible assets except __________.
  A. patents
  B. copyrights
  C. franchises
  D. Accounts Receivable

Question 16 of 20 5.0 Points
The exclusive right to produce and sell a manuscript is called a __________.
  A. copyright
  B. franchise
  C. patent
  D. goodwill

Question 17 of 20 5.0 Points
A company purchases a patent for $50,000. The patent will be amortized over five years. The entry to record the amortization in the first year is __________.
  A. debit Patents $50,000; credit Cash $50,000
  B. debit Amortization of Patents $10,000; credit Patents $10,000
  C. debit Amortization of Patents $50,000; credit Patents $50,000
  D. debit Patents $10,000; credit Amortization of Patents $10,000

Question 18 of 20 5.0 Points
Salvage value was ignored when originally calculating the units-of-production depreciation. This error would cause __________.
  A. the period's net income to be overstated
  B. the period's net income to be understated
  C. the period end assets to be overstated
  D. none of the above

Question 19 of 20 5.0 Points
The process of writing off an intangible asset is __________.
  A. depreciation
  B. depletion
  C. amortization
  D. none of the above

Question 20 of 20 5.0 Points
The allocation of the cost of a natural resource is __________.
  A. depreciation
  B. depletion
  C. amortization
  D. accrual














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