preciation expense for the period is zero. Subsequent expenditures incurred to maintain the asset's capacity or efficiency are generally accounted as capital expenditures. lect the correct response: Only the 2nd statement is correct. Both statements are correct. Only the 1st statement is correct. Both statements are incorrect.

preciation expense for the period is zero. Subsequent expenditures incurred to maintain the asset's capacity or efficiency are generally accounted as capital expenditures. lect the correct response: Only the 2nd statement is correct. Both statements are correct. Only the 1st statement is correct. Both statements are incorrect.

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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Which of the following is not true in regard to selling fixed assets? a.If the selling price is more than the book value, a gain is recorded. b.The cash receipt is recorded. c.The journal entry is similar to discarding fixed assets. d.Accumulated Depreciation will be credited.
TRUE OR FALSE
3) Which of the following best describes a depreciation base?7) The acquisition cost of an asset relative to its fair value O The estimated market value of an asset at the end of its useful life O The historical cost of an asset less the depreciation recognized to date O The amount that should be expensed over an asset's useful life
Which of the following statements is correct with respect to the sale of a depreciable asset? Multiple Choice A gain occurs when the selling price exceeds book value. A sale for a gain results in a decrease in total assets. A sale for a loss results in an increase in total assets. A loss occurs when the selling price is more than book value.
1. What are the three main factors used in determining depreciation of a fixed asset? 2. What is the double-declining balance method and what are the benefits of it?
When an expenditure is made and it is treated as an expense but should have been capitalized, the resulting impact in the year of the expenditure would be: A. Assets would be overstated, net income would be understated. B. Both the assets and net income would not be affected. C. Assets would be understated, net income would be understated. D. Assets would be understated, net income would be overstated.
Which of the following is true? O The book value at the end of an asset's useful life will be the same under all the depreciation methods allowed under generally accepted accounting principles. The annual depreciation expense will usually differ under the various depreciation methods. The total depreciation in the accumulated depreciation account will be the same at the end of the asset's useful life under all the methods allowed under generally accepted accounting principles. O All are true.
In determining the value in use, which of the following cash flow is excluded from the computation? I. Income tax receipts or payments. II. Net cash flows received or paid on the disposal of the asset at the end of its useful life in an arm's length transaction which is after using the asset. III. Future costs of improving or enhancing the asset's performance.
The impairment test for goodwill is conducted based on the cash-generating unit to which the goodwill has been assigned. After an impairment loss is recorded for goodwill, the recoverable amount becomes the basis for the impaired asset and is used to calculate amortization in future periods. options : both statement false first statement true and second statement false fisrt statement false and second statement ttrue . both sttament true
Which of the following is not a capital expenditure decision Select one: a. Improvement in fixed asset b. Purchase of goodwill c. None of the options d. Replacement in fixed asset e. R&D Expenditure
Which of the following statements is FALSE? Some intangible assets are not required to be amortized. Research and development expenditures are expensed as incurred because of the uncertainty regarding their future cash flows. Amortization expense is generally recorded with a credit to the Accumulated Amortization account. Internally generated goodwill is not capitalized in the accounts.
If the accounting rate of return exceeds the required accounting rate of return, O A. invest in the capital asset. B. only invest if the payback period is also less than the required rate of return. O C. do not invest in the capital asset. OD. only invest if the payback period is also greater than the required rate of return.