Accounting multiple choice exam ch 7

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 deprecation?

all methods result in the same total depreciation

the book value of an asset is equal to the

assets cost less accumulated depreciation

which of the following correctly describes the nature of depreciation

depreciation represents the allocation of the cost 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 assets life?

double decline balance method

which of the following depreciation methods typically results in the highest depreciation expense during the first year of an assets life?

double declining balance method

Which of the following expenditures should be recorded as an asset?

interest cost during the construction period of new building

which of the following will maximize net income by minimizing depreciation expense in the first year of the assets life?

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

the rest urn on assets is equal to the

profit margin times asset turnover

which of the following expenditures should be recorded as an expense?

repair and maintenance that maintain current benefits

research and development costs generated internally

should be expensed

the balance in the accumulated depreciation account represents

the amount charged to depreciation expense since the acquision of the plant asset

accumulated depreciation is

a contra asset

equipment originally costing $100,000 has accumulated depreciation of $65,000. if sold for $40,000, the com pang should record

a gain of 5,000

which of the following is properly recorded as an intangible asset?

a purchased patent

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 statements is true regarding the amortization of intangible assets

the expected residual value of most intangible assets is 0

sandwich express incurred the following costs related to its purchase of a bread machine

$25,200

the original cost of a piece of equipment was $100,000. the equipment was depreciated using straight-line with annual depreciation of $20,000. after 2 years, the fair value of the equipment is $82,000. How much is the book value of the equipment at the end of the second year?

$60,000