Accounting 1 Chapter 10

2. Financial statement data for the year ending December 31 for Navajo Company follow: Sales $2,550,000 Net income 1,258,000 Fixed assets (net): Beginning of year 800,000 End of year 985,000 The fixed asset turnover ratio for Navajo Company on December 31 would be 2.9. 2.6. 1.4. 1.9.

2.9

1. Assume that equipment acquired at a cost of $10,000 is fully depreciated. On June 30, the equipment is discarded. The entry to record the discard would be to debit __________ and credit __________. Equipment; Accumulated Depreciation—Equipment Accumulated Depreciation—Equipment; Equipment Equipment; Depreciation Expense—Equipment Accumulated Depreciation—Equipment; Depreciation Expense—Equipment abcd

Accumulated Depreciation—Equipment; Equipment

1. The entry to record the amortization of a patent would include a debit to __________ and a credit to __________. Amortization Expense; Patents Amortization Expense; Accumulated Amortization Patents; Accumulated Amortization Patents Expense; Accumulated Amortization

Amortization Expense; Patents

2. Accumulated depreciation would be shown on which financial statement? Balance sheet Income statement Statement of cash flows Statement stockholders' equity

Balance sheet

3. Which of the depreciation methods is called an accelerated depreciation method? Straight-line method Double-declining-balance method Units-of-activity method Square-feet method.

Double-declining-balance method

1. Which of the following is NOT a characteristic of natural resources? Removed for sale Exist physically Naturally occurring Removed and sold over more than one year

Exist physically

2. Which company has the highest percentage of fixed assets? Microsoft Corporation Target Corporation Facebook, Inc. McDonald's Corporation

McDonald's Corporation

2. The exclusive right to publish and sell a literary, artistic, or musical composition is granted by a patent. trademark. copyright. franchise.

copyright.

3. Fixed assets considered a long-term commitment because of their cost. classification under total assets. commitment to the monitoring program. infrequent use.

cost.

2. The entry to record a gain on an exchange of similar assets would include a __________ to __________. debit; Cash debit; Gain on Exchange of Equipment credit; Gain on Exchange of Equipment credit; Accumulated Depreciation—Equipment

credit; Gain on Exchange of Equipment

2. The entry to record the sale of equipment at book value would include a __________ to __________. debit; Loss on Sale of Equipment credit; Cash debit; Accumulated Depreciation credit; Accumulated Depreciation

debit; Accumulated Depreciation

4. The journal entry to record costs related to extraordinary repairs would include a __________ to __________. credit; Accumulated Depreciation debit; Accumulated Depreciation debit; Cash credit; the respective asset account

debit; Accumulated Depreciation

2. The journal entry to record depletion would include a __________ to __________. debit; Depletion Expense credit; Depletion Expense debit; Accumulated Depreciation credit; Natural Resource Expense

debit; Depletion Expense

2. The difference between a fixed asset's initial cost and residual value is known as its depreciable cost. book value. accumulated depreciation. net revenue.

depreciable cost.

2. If a purchased item is long-lived but not used in normal operations, the asset is classified and recorded as a(n) fixed asset. investment. expense. contra asset.

investment.

1. All of the following fixed assets are depreciated EXCEPT building. truck. land. equipment.

land.

1. The fixed asset turnover ratio is computed as __________ divided by __________. sales; average book value of fixed assets net income; average book value of fixed assets sales; book value of fixed assets average book value of fixed assets; sales

sales; average book value of fixed assets

1. When a seller allows a buyer an amount for old equipment traded in for new equipment having a similar use, this amount is called boot. the trade-in allowance. commercial substance. net book value.

the trade-in allowance.

1. Which is NOT a fixed asset? airplane trademark equipment land

trademark

1. All of the following are considered fixed assets EXCEPT building. truck. land. accounts receivable.

accounts receivable.

1. Cost less accumulated depreciation equals depreciable cost. book value. residual value. accumulated value.

book value.