Question1 Which of the following items should NOT be depreci

Question1 Which of the following items should NOT be depreciatedbecause it doesn’t wear out?  a.Natural resources  b.Landc.Tangible property, plant, andequipment other than land  d.Intangible property  Question2 Which of the following accounting principles requiresdepreciation? a.The revenue concept  b.The matching concept  c.Reliability concept  d.Entity concept  Question3 Which of the following items is a factor to consider whencomputing depreciation expense?  a.The useful life of the assetb.The residual value of theasset  c.The cost of the asset  d.All of the above  Question4 Which of the following factors are considered asestimates?  a.The cost of the assetb.The useful life of the asset c.The residual value of theasset  d.Both B and C  Question5 Which of the following depreciation methods allocates an equalamount of depreciation to each year?  a.Units-of-production  b.Straight-line  c.Declining-balance  d.All of the above  Question6 Which of the following depreciation methods writes off moredepreciation near the start of an asset’s life than in later years?  a.Units-of-production  b.Straight-line  c.Declining-balance  d.All of the above  Question7 Which of the following properly describes accumulated depreciation? a.Accumulated depreciation is acontra-liability account.  b. Accumulated depreciation is anexpense account.  c.Accumulated depreciation is acontra-equity account.  d.Accumulated depreciation is acontra-asset account.  Question8 Which ofthe following is the purpose of accumulated depreciation?  a.Accumulated depreciation’s purposeis to provide details about the cost expiration of natural assets. b.Accumulated depreciation’s purposeis to provide details about the cost expiration of intangible assets.  c.Accumulated depreciation is anexpense.  d.Accumulated depreciation’s purposeis to capture all the depreciation taken to date on plant assets.  Question9 Which ofthe following depreciation methods does NOT use a residual value in thedepreciation formula?  a.Units-of-production  b.Declining-balance  c.Straight-line  d.All of the above  Question10 On January1, 2011, Zane Manufacturing Company purchased a machine for $40,000.  Thecompany expects to use the machine a total of 24,000 hours over the next 6years.  The estimated sales price of the machine at the end of 6 years is$4,000. The company used the machine 8,000 hours in 2011 and 12,000 in 2012.What is depreciation expense for 2011 if the company usesdouble-declining balance depreciation?  a.$13,333  b.$8,889  c.$6,000  d.$10,000Question11 On January1, 2011, Zane Manufacturing Company purchased a machine for $40,000.  Thecompany expects to use the machine a total of 24,000 hours over the next 6years.  The estimated sales price of the machine at the end of 6 years is$4,000. The company used the machine 8,000 hours in 2011 and 12,000 in 2012.  What is depreciation expense for 2012 if the companyuses double declining balance depreciation?  a.$13,333  b.$8,889  c.$6,000  d.$10,000  Question12 On January1, 2011, Zane Manufacturing Company purchased a machine for $40,000.  Thecompany expects to use the machine a total of 24,000 hours over the next 6years.  The estimated sales price of the machine at the end of 6 years is$4,000.  The company used the machine 8,000 hours in 2011 and 12,000 in2012.  What is the BOOK VALUE of the machine at the end of2012 if the company uses double-declining balance depreciation?  a.$20,000  b.$17,778  c.$13,333  d.$28,000  Question13 On January1, 2011, Zane Manufacturing Company purchased a machine for $40,000.  Thecompany expects to use the machine a total of 24,000 hours over the next 6years.  The estimated sales price of the machine at the end of 6 years is$4,000.  The company used the machine 8,000 hours in 2011 and 12,000 in2012. What is depreciation expense for 2012 if the company usesstraight-line depreciation?a.$6,000  b.$9,000  c.$13,333  d.$10,000  Question15 The depreciation method wheresalvage value is ignored until the end of the life of the asset is: a.straight-line.b.MACRS.c.double-declining-balanced.units-of-output.Question16 Anasset has a life of 3 years.  It cost $90,000 and has an expected salvagevalue of $15,000.  Using straight-line depreciation,what is the depreciation expense each of the three years? a.$30,000b.$35,000c.$25,000d.$45,000Question17 An asset costs $80,000 and has asalvage value of $7,000.  It has a four-year life.  Usingdouble-declining-balance depreciation, year 1 depreciation would be: a.$20,000.b.$40,000.c.$18,250.d.$36,500.Question18 A company purchased a computer onJuly 1, 2009. The computer has an estimated useful life of 5 years andwill have no salvage value and was purchased for $10,000. It is estimated that the computercan be used for 5,000 hours.  The computer was used for 450 hoursduring 2009.  If the goal is to reduce taxableincome to the lowest amount, which method should be elected and how muchdepreciation can be deducted in 2009? Answer a.Units-of-production, $900  b.Straight-line, $1,000    c.Double declining-balance,$2,000  d.None of the above  Question19 Which depreciation method is used most often for taxpurposes?a.Unitsof productionb.Straight-linec.Double-declining-balanced.Noneof the aboveQuestion20 When is a gain on disposal of anasset recorded?  Answer a.A gain is recorded whenaccumulated depreciation is less than the cash received.  b.A gain is recorded when theasset’s residual value is less than the cash received.  c.A gain is recorded when the assetis sold for a price less than the asset’s book value.d.A gain is recorded when the assetis sold for a price greater than the asset’s book value.  Question21 An asset was purchased for $12,000.The asset’s estimated useful life was 3 years and its residual value was$2,000. How much gain or loss is reported ifthe asset is sold for $3,000 at the beginning of the fourth year?  Answer a.$1,000 gain  b.$2,000 loss  c.No gain or loss  d.$1,000 loss  Question22 An asset was purchased for$12,000.  The asset’s estimated useful life was 3 years and its residualvalue was $2,000.  How much gain or loss is reported ifthe asset is sold for $1,000 at the end of the fourth year?  Answer a.$1,000 loss b.$1,000 gain  c.$2,000 loss  d.No gain or loss  Question23 Which of the following items isincluded in the journal entry if a company sells equipment at a price less thanits book value?  Answer a.A debit to Equipment for its bookvalue  b.A credit to Gain on sale ofequipment  c.A debit to Loss on sale ofequipment  d.A credit to Accumulateddepreciation  Question24 Kelly Petroleum Products ownsfurniture that was purchased for $19,600.  Accumulated depreciationis $17,300.  The furniture was sold for$3,800.  Which of the following is thecorrect entry to record the transaction?Answer a.Accumulated depreciation17,300Cash3,800Gain on sale of furniture1,500Furniture19,600b.Accumulated depreciation17,300Cash3,800Furniture31,100c.Furniture19,600Gain on sale of furniture3,800Cash2,700Accumulated depreciation17,300d.Furniture19,600Cash2,700Gain on sale of furniture 5,000Accumulated depreciation17,300

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