An expenditure that maintains an existing asset so that it can function in the manner intended should be Select one: a. partially expensed in the period in which it is made. b. fully capitalized in the period in which it is made. c. partially capitalized in the period in which it is made. d. fully expensed in the period in which it is made.

An expenditure that maintains an existing asset so that it can function in the manner intended should be Select one: a. partially expensed in the period in which it is made. b. fully capitalized in the period in which it is made. c. partially capitalized in the period in which it is made. d. fully expensed in the period in which it is made.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 5DQ

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An asset is said to be fully depreciated when:
The historical cost principle requires that assets be reported at their: a) Market value b) Replacement cost c) Fair value d) Original cost
The cost incurred to extend an asset's useful life is recorded as: O a. routine expenditures. Ob. capital expenditures. Oc. accrued expenditures. Od. maintenance expenditures.
The cost incurred to extend an asset's useful life is recorded as: O a. maintenance expenditures. O b. accrued expenditures. O c. routine expenditures. d. capital expenditures.
Which of the following most accurately reflects the concept of depreciation as used in accounting? The proccess of charging the decline in value of an economic resource to income in the period in which the benefit occured. O The proccess of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset. OA method of allocating asset cost to an expense account in a manner which closely matches the physical deterioration of the tangible asset involved. O An accounting concept that allocates the portion of an asset used up during the year to the contra asset account for the purpose of properly recording fair market value of tangible assets.
In which of the following situations would a cost incurred after an asset’s acquisition be capitalized? A.The useful life of the asset is increased. B.The amount of the expenditure must be immaterial. C.The expenditure is necessary to maintain the working order of the asset. D.There is no increase in the useful life of an asset.
The cost of an asset that is subject to depreciation is called a.depreciable cost. b.trade-in value. c.salvage value. d.revenue.
Income earned from incidental operations before an asset is put to use is: deducted from the cost of the asset added to the cost of the asset immediately recognized in P/L together with related expense ignored
Under IFRS a. research and development expenditures are expensed in the period incurred. b. research and development expenditures are capitalized and amortized. c. development expenditures that meet certain criteria are capitalized and amortized; research expenditures are expensed in the period incurred. d. research expenditures that meet certain criteria are capitalized and amortized; development expenditures are expensed in the period incurred.
Borrowing costs on qualifying assets are? a) Always expensed b) Capitalized during the construction period c) Added to reserves d) Deducted from the asset cost
In interest capitalization related to self constructed assets, all of the following must occur before the capitalization window begins except: A.Expenditures for the assets have been incurred B.Depreciation of the asset being built has been recognized C.Activities that are necessary to get the asset ready for its intended use are in progress D.Interest has to be incurred
Depreciation can be defined as the measure of cost or revalued amount of economic benefits of a tangible fixed asset that has been consumed during a period. State the principle or conventions that support depreciation and indicates the different measures of this cost (depreciation) as an expense, and assess each measures’ input on Income Statement and the Balance Sheet.