All of the following are characteristics of plant assets EXCEPT which one?They are long term in natureThey posess physical substanceThey are acquired for use in the operatations of the businessThey are held for resale

Plant assets, also known as fixed assets or property, plant, and equipment (PP&E), are long-term…

Answered: All of the following are…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Plant assets are recorded at historical cost. What does the historical cost of a plant asset include?
Allocating the cost of a natural resource to the units removed is called amortization. True False 2.Costs incurred to acquire long-lived assets are capital expenditures. True False 3.Accumulated depreciation, as used in accounting, may be defined as: o An expense of doing business. o Funds (or cash) set aside to replace the asset being depreciated. o portion of the cost of plant asset recognized as expense since asset was acquired. o Earnings retained in the business.4. On January 1, 1999, Ubot Inc. purchased a piece of equipment for $60,000. It is estimated to have an economic life of 5 years and a salvage value of $10,000. The 200% declining-balance method for depreciation is used. What is the book value of the asset at the end of year 2000 ? A. o $24,000 B. o $40,000 C. o $36,000 D. o $21,600 5.It is not necessary to disclose the maturity dates of long-term obligations on the financial statements. True False 6.The…
What is the process by which businesses spread the allocation of an intangible asset’s cost over its useful life?
Identify the main difference between (a) plant assets and current assets, (b) plant assets and inventory, and (c) plant assets and long-term investments.
Plant Asset Cost Listed below are certain costs (or discounts) incurred in the purchase or construction of new plant assets. (1) Indicate whether the costs should be expensed or capitalized (meaning they are included in the cost of the plant assets on the balance sheet). (2) For costs that should be included in plant assets, indicate in which category of plant assets (Equipment, Building, or Land) the related costs should be recorded on the balance sheet. Expensed or Capitalized Asset Category 1. Charges incurred to train employees to use new equipment 2. Invoice cost to purchase new equipment 3. Deduction for an early payment discount taken on the purchase of new equipment 4. Real estate commissions incurred on land purchased for a new plant 5. Property taxes on land incurred after it was purchased 6. Costs of tune-up for the truck used to deliver new equipment 7. Costs to lay the foundation for a new building 8. Insurance on a new building during the construction phase
Describe the common characteristics of assets classified as property, plant, and equipment and identify some assets included in this classification.
Which of the following is NOT a plant asset that is reported on the balance sheet? Land Buildings Trademarks Furniture and fixture
An intangible asset is an asset that has no physical substance. Although it is not an asset that can be seen or touched, intangible assets are also valuable to an entity, and can influence its long-term performance. Several types of intangible assets are encountered in practice such as patent and trademark. Following are the statements related to intangible assets: (i) A sign which distinguishes the goods and services of one entity from those of another. (ii) A form of protection provided by the law to authors of original creative works, including literary works, musical works, artistic works, films, sound recordings, and broadcasts. (iii) The application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use. (iv) A method of marketing and distributing products and services based on a two-party contract. (v) An exclusive…
Which costs would most likely be capitalized in the “Land Improvements” account? Costs associated with clearing the land for its intended business use Costs associated with paving and fencing on the land Costs associated with constructing a building on the land
Which of the following costs incurred internally to create an intangible asset is generallyexpensed? a. Research and development costs.b. Filing costs.c. Legal costs.d. All of the above.
The term "Fixed Assets" means the same thing as: Multiple Choice Intangible Assets. Current Assets. Natural Resources. Merchandise Inventory. Plant Assets.
Why are the cost of plant/long term assets recovered through depreciation vs. expensed out during the period purchased?

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All of the following are characteristics of plant assets EXCEPT which one? They are long term in nature They posess physical substance They are acquired for use in the operatations of the business They are held for resale