# ACCOUNTING

101. The total cost of an asset less its accumulated depreciation is called:
A. Historical cost.
B. Book value.
C. Present value.
D. Current (market) value.
E. Replacement cost.

102. A method that charges the same amount of expense to each period of the asset’s useful life is called:
A. Accelerated depreciation.
B. Declining-balance depreciation.
C. Straight-line depreciation.
D. Units-of-production depreciation.
E. Modified accelerated cost recovery system (MACRS) depreciation.

103. A method that allocates an equal portion of the total depreciable cost for a plant asset to each unit produced is called:
A. Accelerated depreciation.
B. Declining-balance depreciation.
C. Straight-line depreciation.
D. Units-of-production depreciation.
E. Modified accelerated cost recovery system (MACRS) depreciation.

104. A depreciation method in which a plant asset’s depreciation expense for a period is determined by applying a constant depreciation rate to the asset’s beginning-of-period book value is called:
A. Book value depreciation.
B. Declining-balance depreciation.
C. Straight-line depreciation.
D. Units-of-production depreciation.
E. Modified accelerated cost recovery system (MACRS) depreciation.

105. A depreciation method that produces larger depreciation expense during the early years of an asset’s life and smaller expense in the later years is a (an):
A. Accelerated depreciation method.
B. Book value depreciation method.
C. Straight-line depreciation method.
D. Units-of-production depreciation method.
E. Unrealized depreciation method.

106. A company purchased a delivery van for \$23,000 with a salvage value of \$3,000 on September 1, 2008. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, 2008?
A. \$1,000.
B. \$1,333.
C. \$1,533.
D. \$4,000.
E. \$4,600.

107. A company purchased a cash register on January 1 for \$5,400. This register has a useful life of 10 years and a salvage value of \$400. What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method?
A. \$ 500.
B. \$ 800.
C. \$ 864.
D. \$1,000.
E. \$1,080.

108. A company purchased a rope braiding machine for \$190,000. The machine has a useful life of 8 years and a residual value of \$10,000. It is estimated that the machine could produce 750,000 units of climbing rope over its useful life. In the first year, 105,000 units were produced. In the second year, production increased to 109,000 units. Using the units-of-production method, what is the amount of depreciation that should be recorded for the second year?
A. \$25,200.
B. \$26,160.
C. \$26,660.
D. \$27,613.
E. \$53,160.

109. Revenue expenditures:
A. Are additional costs of plant assets that do not materially increase the asset’s life or its productive capabilities.
B. Are known as balance sheet expenditures.
C. Extend the asset’s useful life.
D. Substantially benefit future periods.
E. Are debited to asset accounts.

110. Another name for a capital expenditure is:
A. Revenue expenditure.
B. Asset expenditure.
C. Long-term expenditure.
D. Contributed capital expenditure.
E. Balance sheet expenditure.

111. Extraordinary repairs:
A. Are revenue expenditures.
B. Extend an asset’s useful life beyond its original estimate.
C. Are credited to accumulated depreciation.
D. Are additional costs of plants assets that do not materially increase the asset’s life.
E. Are expensed as incurred.

112. Ordinary repairs:
A. Are expenditures to keep an asset in normal operating condition.
B. Are necessary if an asset is to perform to expectations over its useful life.
C. Are treated as expenses.
D. Include cleaning, lubricating, and normal adjusting.
E. All of these.

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