Chapter 8
Gains and losses are reported
as non-operating items on the income statement
Which of the following conveys an exclusive right to produce and sell the content contained in a textbook?
copyright
Which of the following is not a tangible asset?
copyright
Tangier Co. paid cash to purchase a long-term operational asset. The cost of the asset will be expensed (depreciated)
over the useful life of the asset
The MACRS method of determining depreciation expense has been established by the
Internal Revenue Service
The acronym MACRS stands for which the following?
Modified Accelerated Cost Recovery System
Which of the following is an intangible asset?
all of the answers are name of intangible assets. *(patent, copyright, trademark)
When reporting to the Internal Revenue System companies are most likely to use
an accelerated depreciation
All costs associated with a machine after it is operational are expensed the period they are incurred. This statement is
false
If a company has to change an estimate, such as the salvage value of an asset, the company is required to reissue prior yr statements that were based on the estimate. This statement is
false
The amount of depletion expense is accumulated in a contra asset account at the end of each accounting period. This statement is
false
The book value of most intangible assets is normally greater than the market value. This statement is
false
When the total estimated market value of assets acquired in a basket purchases greater than the cost of the purchase, the company making the purchase must recognize a gain. The statement is
false
Depletion is the term used to recognize expense associated with
natural resources
Computer equipment is a (an)
tangible asset
Which of the following is not an intangible asset?
timber
A franchise is an intangible asset that provides privileges related to other intangible assets. This statement is
true
Goodwill is recognized only when it is purchased. This statement is
true
Goodwill is the mix of variable that are unique to a particular company that enables it to produce average profits. This statement is
true
It is legal for a company to use one method of depreciation for tax reporting and a different method for financial reporting purposes. This statement is
true
Land is different from other tangible assets in that its utility is not diminished by its use. This statement is
true
The revenue stream for Marino Moving Co, fluctuates from yr to yr. Based on this information alone, Marino should use the
units-of-production method to compute depreciation expense