ACC201: Quiz 7

Accumulated depreciation is:

A contra-asset.

Equipment originally costing $100,000 has accumulated depreciation of $65,000. If it is sold for $40,000, the company should record:

A gain of $5,000.

Equipment originally costing $65,000 has accumulated depreciation of $25,000. If the equipment is sold for $30,000, the company should record:

A loss of $10,000.

Which of the following is properly recorded as an intangible asset? An internally developed trademark. A piece of land. An internally developed copyright. A purchased patent.

A purchased patent.

Depreciation in accounting is the:

Allocation of an asset's cost to an expense over time.

The asset's cost less accumulated depreciation is called:

Book value.

A long-term asset is recorded at the:

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

Which of the following depreciation methods typically results in the highest depreciation expense during the first year of an asset's life? Each method will result in the same depreciation during the first year. Straight-line method. Double-declining-balance method. Activity-based method.

Double-declining-balance method.

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

Patent.

Which of the following is not reported as an intangible asset in the balance sheet? Research and development. Goodwill. Patents. Trademarks.

Research and development.