ACCT 2113 - Chapter 7

a long term asset is recorded at the

Cost of the asset plus all costs necessary to the asset ready for use

accumulated depreciation is

a contra-asset

Which of the following is properly recorded as an intangible asset

a purchased patent

if equipment is retired, which of the following accounts would be debited

accumulated depreciation

Over the entire service life of an asset, which depreciation method records the highest total depreciation

all the methods result in the same total depreciation

depreciation in accounting is the

allocation of an asset's cost to an expense over time

Which of the following expenditures should be recorded as an asset

an addition which increases future benefit

Which of the following expenditures should be capitalized

an improvement to a tangible asset

the book value of an asset is equal to the

asset's cost less accumulated depreciation

The asset's cost less accumulated depreciation is called

book value

we normally record a long-term asset at the

cost of the asset plus all costs necessary to get the asset ready for use

Which of the following correctly describes the nature of depreciation

depreciation represents the allocation of the costs of property, plant, and equipment over its service life

Which of the following depreciation methods typically results in the highest depreciation expense during the first year of an asset's life

double declining balance method

Which of the following expenditures should be recorded as an asset

interest costs during the construction period of a new building

Which of the following will maximize net income by minimizing depreciation expense in the first year of the asset's life

long service life, high residual value, and straight-line depreciation

Which of the following expenditures should be recorded as an expense

ordinary repairs and maintenance

an exclusive 20-year right to manufacture a product or to use a process is a

patent

which of the following expenditures should be recorded as an expense

repairs and maintenance that maintain current benefits

Which of the following is NOT recorded as an intangible asset in the balance sheet

research and development

Which of the following will result in higher depreciation expense in the first year of the asset's life

short service life and low residual value

research and development costs

should be expensed

the balance in the accumulated depreciation account represents

the amount charged to depreciation expense since the acquisition of the planet asset

the amount of the gain on the sale of equipment equals

the selling price minus the book value of the equipment