Keren Keziah Castaneda - BAT4M CH 10 Self Quiz 2012

BAT4M SELF-QUIZ CHAPTER 10
This self quiz is provided to you to enable you to “test” your knowledge and
understanding about accounting concepts in chapter 10.
Read each statement carefully. Select the correct answer.
1. Capital assets are made up of:

a. Plant, property and equipment; natural resources
b. Plant, property and equipment; intangible assets
c. Plant, property and equipment; natural resources; intangible assets
d. None of the above
2. When costing a capital assets, one considers:

a. all costs necessary and reasonable
b. all costs necessary and reasonable to purchase the asset
c. all costs necessary and reasonable to purchase the asset, and to get it into
useable condition
d. none of the above
3. QRX Company purchases equipment at a ticket price of $10,000; freight

charges of $1,000; in-transit insurance, $2,000; creation of a concrete-
base, $1,500; installation charges, $500; trial run, $1,000.
The recorded cost of the equipment is:
a. $10,000
b. $13,000
c. $14,500
d. $ 16,000
4. Bee Bop Company purchases land with a building on it for a total of

$300,000. It demolishes the building at a cost of $100,000 and gets
$35,000 from salvaged materials removed from the building. The
recorded cost of the land is:
a. $300,000
b. $400,000
c. $365,000
d. $100,000
5. Runners Company purchases an older building in the perfect downtown

location for a ticket price of $500,000. It spends $350,000 to repair and
upgrade this building. The recorded cost of the building is:
a. $500,000
b. $350,000
c. $850,000
d. $150,000
6. Super Duper Company purchases land at a ticket price of $300,000. The
commission fee is $5,000. It pays $2,000 delinquent taxes; $3,000 to
drain, clear and grade the land; $10,000 for chain link fence to surround
the land; $3,000 for landscaping work and $1,000 for a decorative
fountain. The recorded cost of land is:
a. $300,000
b. $307,000
c. $324,000
d. $318,000
7. Re-read question #6 above. The recorded cost of the special account

called land improvements is:
a. $17,000
b. $3,000
c. $14,000
d. $2,000
8. The special account that records the amount of money stored up to pay
for restoration of a natural resource, such as a mine, is called:
a. Liability Expense, Mine
b. Amortization Restoration, Mine
c. Liability for Restoration
9. The straight line method formula for depreciation is:

a) straight line = cost minus salvage value divided by estimated useful life
b) straight line = cost plus salvage value divided by estimated useful life
c) straight line = cost times salvage value divided by estimated useful life
d) straight line = cost divided by salvage value times estimated useful life
10. Biggers Company uses the straight line as a percentage depreciation

method. It has equipment that cost $65,000, with no salvage value and an
estimated useful life of 5 years. The dollar amount of depreciation
claimed in the first year is:
a. $13,000
b. $10,000
c. $11,000
d. $9,000
11. Jackson’s Business uses the “twice the straight line rate” method to
depreciate its equipment. The straight line rate is 20%. The equipment
cost $80,000 with $4,000 salvage value and is expected to be useful to the
business for 5 years. The amount of depreciation recorded in the first
year is:
a. $30,400
b. $32,000
c. $8,000
d. $10,000
12. Grandma’s Manufacturing uses the sum–of-the-years digits as its

depreciation method. It has a machine that cost $215,000 with a salvage
value of $5,000 and an estimated useful life of 5 years. The amount of
depreciation recorded in the second year is:
a. $70,000
b. $42,000
c. $56,000
13. A business may select an accelerated depreciation method to use on its

equipment and machinery because:
a. this method allows a lower depreciation amount to be recorded in the early
years of the asset when repair/maintenance costs are higher
b. this method allows a higher depreciation amount to be recorded in the early
years of the asset when repair/maintenance costs are lower
c. this method allows a higher depreciation amount to be recorded in the later
years of the asset when repair/maintenance costs are higher
d. this method allows a lower depreciation amount to be recorded in the later
years of the asset when repair/maintenance costs are lower
1
14. A right, privilege or benefit of use is called:

a. a tangible asset
b. a plant, property, or equipment item
c. an intangible asset
d. a natural resource
15. A patent’s legal life is:

a. 10 years
b. 15 years
c. 20 years
d. 25 years
16. Patents are generally amortized:
a. over the estimated useful life, or legal life, whichever is longer
b. over the estimated useful life, or legal life, whichever is shorter
c. over the estimated useful lilfe
d. over the legal life
17. The account used to record the corresponding credit in the amortization
entry for patent is:
a. accumulated amortization - patent
b. amortization expense – patent
c. patent
d. none of the above
18. As a student in Grade 12 accounting, you would say to your teacher, to

show appreciation for this self-quiz:
a. thanks very much
b. thanks
c. wow! Thanks
d. all of the above

Keren Keziah Castaneda - BAT4M CH 10 Self Quiz 2012

Uploaded by

Copyright:

Available Formats

Keren Keziah Castaneda - BAT4M CH 10 Self Quiz 2012

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Keren Keziah Castaneda - BAT4M CH 10 Self Quiz 2012

Uploaded by

Copyright:

Available Formats

BAT4M SELF-QUIZ CHAPTER 10

Read each statement carefully. Select the correct answer.

1. Capital assets are made up of:

2. When costing a capital assets, one considers:

3. QRX Company purchases equipment at a ticket price of $10,000; freight

4. Bee Bop Company purchases land with a building on it for a total of

5. Runners Company purchases an older building in the perfect downtown

7. Re-read question #6 above. The recorded cost of the special account

9. The straight line method formula for depreciation is:

10. Biggers Company uses the straight line as a percentage depreciation

12. Grandma’s Manufacturing uses the sum–of-the-years digits as its

13. A business may select an accelerated depreciation method to use on its

14. A right, privilege or benefit of use is called:

15. A patent’s legal life is:

18. As a student in Grade 12 accounting, you would say to your teacher, to

You might also like