Statement 1: All property, plant and equipment shall be initially measured at cost and presented in the financial statement at its recoverable amount. Statement 2: The estimated useful life of the asset including the depreciation expense recognized during the period is

Statement 1: All property, plant and equipment shall be initially measured at cost and presented in the financial statement at its recoverable amount. Statement 2: The estimated useful life of the asset including the depreciation expense recognized during the period is

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 1SEA

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Under current standards, a subsequent expenditure on an item of property, plant and equipment is most likely to be capitalized to the asset account. expensed debited to the related accumulated depreciation account. a or c
Assets classified as property, plant, and equipment are reported at a. each asset’s estimated market value at the balance sheet date. b. each asset’s estimated salvage value at the balance sheet date. c. the estimated depreciable cost at the balance sheet date. d. each asset’s original cost less depreciation since acquisition.
GAAP regulations state that for each of the types of plant assets, a company must disclose the following: The method of depreciation used, the original cost of the asset, and total accumulated depreciation expense. The original cost of the asset, first-period depreciation, and the method of depreciation. The method of depreciation, current fair market value, and the original cost of the asset. The method of depreciation, associated revenue generated, and the original cost of the asset.
Question 1. For any single intangible asset that is material to an entity's financial statements, which of the following is required to be disclosed? Select all that apply. A. Remaining amortisation period of the intangible asset B. Carrying amount of the intangible asset C. Line item on the income statement whichtotal amortization is included D. Description of the intangible asset
Which of the following disclosures must be included in the notes to the financial statements? the model numbers of each depreciable asset. the methods used in computing depreciation for each major class of depreciable asset. the rate of return on investment for each major class of depreciable asset. all of these choices.
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
Net book value is Select one: a. Amount of which an asset is recognized in the balance sheet after deducting any accumulated depreciation. b. Net amount which the entity expects to obtain for an asset at the end of its useful life. c. Amount of cash or cash equivalent paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction. d. Cost of an asset or the amount substituted for cost in the financial statements, less its residual value
PAS 16 requires that revaluation surplus resulting from initial revaluation property, plant and equipment should be treated in one of the following ways. Which of the four options mirrors the requirements of PAS 16? a. Released to the income statement an amount equal to the difference between the depreciation calculated on historical cost vis-à-vis revalued amount. b. Debited to the class of property, plant and equipment that is being revalued and credited to a reserve captioned “revaluation surplus” which is presented under “equity”. c. Deducted from current assets and added to the property, plant, and equipment. d. Credited to retained earnings as this is an unrealized gain.
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
Estimate the average total estimated useful life of depreciable property, plant, and equipment. Does the estimate reconcile with stated accounting policy on useful lives for property, plant, and equipment?
Gains and losses arising from the retirement or disposal of an item of property, plant and equipment shall be determined as the difference between * Gross disposal proceeds and the cost of the asset Gross disposal proceeds and the carrying amount of the asset Net disposal proceeds and the cost of the asset Net disposal proceeds and the carrying amount of the asset
During the construction period of these assets, the cost of the construction shall be charged to construction in progress account and the same shall be credited upon completion. Assets under this category are not subject to depreciation. a) Public infrastructures b) Other leasehold improvements c) Leasehold improvements- land d) Land improvements