Match the cash expenditures given below with the appropriate accounting treatment. An individual classification may be used more than once, or not at all.
Instructions: Match the cash expenditures given below with the appropriate accounting treatment. An individual classification may be used more than once, or not at all.
Treatments
A. Record the expenditure as an asset and
B. Record the expenditure as an asset and amortize it.
C. Record the expenditure as an asset and deplete it.
D. Record the expenditure as an asset but do not systematically allocate it to expense.
E. Record the expenditure as an expense in the current period.
F. None of the above is appropriate.
Expenditures
____ 1. Acquired a truck.
____ 2. Purchased a copyright from an author.
____ 3. Paid for minor repairs to a building.
____ 4. Purchased a producing silver mine.
____ 5. Paid attorney's fees in acquiring land.
____ 6. Paid attorney's fees to defend a patent.
____ 7. Paid prior owner’s real estate taxes in acquiring land.
____ 8. Paid insurance to transport new equipment to your plant.
____ 9. Purchased timberlands to establish a tree farm.
____10. Purchased a business in excess of its net asset value.
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