Filters
Question type
Study Flashcards

A fixed asset turnover ratio of 4.3 indicates that for every:


A) $1 in sales revenue, the firm acquired $4.30 of assets.
B) $1 in fixed assets, the firm earned $4.30 of net income.
C) $1 in assets, the firm paid $4.30 of expenses.
D) $1 in fixed assets, the firm generated $4.30 of net sales.

E) A) and B)
F) All of the above

Correct Answer

verifed

verified

A company bought a piece of equipment for $40,000 and expects to use it for eight years.The company then plans to sell it for $3,500.The company has already recorded depreciation of $35,995.Using the double-declining-balance method,what is the company's annual depreciation expense for the upcoming year?


A) $1,001
B) $9,125
C) $505
D) $10,000

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

City View Limousine depreciates its stretch Hummer using the units-of-production depreciation method and bases usage on the miles driven per year.The estimated useful life of the vehicle is 250,000 miles.The vehicle was purchased for $115,000 and is not expected to have any residual value at the end of its life.It was driven a total of 40,000 miles during the first year of its useful life and 25,000 miles during the second year.What is the amount of Accumulated Depreciation recorded on the vehicle at the end of those two years?


A) $70,769
B) $29,900
C) $46,000
D) $18,400

E) B) and C)
F) All of the above

Correct Answer

verifed

verified

Beta Co.recorded a loss due to impairment of some of its assets.As a result of this journal entry:


A) liabilities are increased.
B) expenses are increased.
C) Stockholders' equity is increased.
D) Assets are decreased.

E) B) and D)
F) B) and C)

Correct Answer

verifed

verified

D

Which of the following assets would be amortized?


A) Land improvements
B) Trademarks
C) Goodwill
D) Franchise

E) B) and C)
F) All of the above

Correct Answer

verifed

verified

Choose the letter of the appropriate category to match each asset described. Asset 1.______ Warehouse 2.______ Licensing rights 3.______ Supplies 4.______ Patents 5.______ Production equipment 6.______ Goodwill 7.______ Land 8.______ Office computer Category T - Tangible long-lived asset I - Intangible long-lived asset N - Not a long-lived asset

Correct Answer

verifed

verified

1.T
2.I
3....

View Answer

The following information is available from the accounting records of the Bright Company: The following information is available from the accounting records of the Bright Company: What is the fixed asset turnover ratio? A) 0.10 times B) 3 times C) 3.27 times D) 10 times What is the fixed asset turnover ratio?


A) 0.10 times
B) 3 times
C) 3.27 times
D) 10 times

E) A) and C)
F) C) and D)

Correct Answer

verifed

verified

Baldini's Restaurant purchased a new building with the surrounding land.The price paid was $1,200,000,including the commission charged on the sale.An appraisal of the land and building at the time of purchase indicated that the market value of the land was $1,000,000 and the market value of the building was $500,000.What amounts would be recorded for the purchase of the two assets?


A) Land $800,000, Building $400,000
B) Land $1,000,000, Building $500,000
C) Land $1,000,000, Building $200,000
D) Land $700,000, Building $500,000

E) A) and D)
F) B) and C)

Correct Answer

verifed

verified

When a company sells equipment for cash on a date other than the last day of the accounting period,it must:


A) record Depreciation Expense for the entire accounting period during which the equipment is sold.
B) record the disposal by reducing the Equipment account and increasing a revenue account; a gain or loss is reported if the decrease and increase are not equal.
C) first record Depreciation Expense for the period up to the date of sale, and then record the disposal by increasing Cash and decreasing both Equipment and Accumulated Depreciation; a gain or loss is reported if the proceeds from the sale do not equal the asset's book value.
D) record Accumulated Depreciation for the entire current accounting period.

E) B) and C)
F) A) and C)

Correct Answer

verifed

verified

If net sales revenue and the average book value of fixed assets both rise 5%:


A) the fixed asset turnover ratio will rise.
B) the fixed asset turnover ratio will fall.
C) the fixed asset turnover ratio will stay the same.
D) the impact on the fixed asset turnover ratio cannot be determined since the beginning values are unknown.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

C

Which of the following statements about tangible long-lived assets is not correct?


A) Depreciation and maintenance are expenses associated with the use of tangible long-lived assets.
B) Assuming no additions, replacements, or extraordinary repairs, the carrying value of a long-lived asset is never more than its original cost.
C) The cost of a long-lived asset minus the Accumulated Depreciation is called the carrying value of the asset.
D) All long-lived assets are depreciated as they are used in the business.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

D

Which of the following statements about straight-line depreciation is correct?


A) Straight-line depreciation is the most common method of depreciation used in the U.S. for financial reporting, but is not commonly used for taxes.
B) When the straight-line method is used to compute depreciation, an asset's carrying value remains constant over the life of the asset.
C) Straight-line depreciation is an approved method to allocate the cost of an asset to expense and it serves as a measure of the physical decline in the asset.
D) The straight line method of depreciation results in a straight-line increase of depreciation expense over the life of an asset.

E) All of the above
F) C) and D)

Correct Answer

verifed

verified

Fixed assets are ______ and are found on the ______:


A) long-lived tangible assets, balance sheet
B) long-lived intangible assets, balance sheet
C) current tangible assets, balance sheet
D) current intangible assets, income statement

E) A) and C)
F) All of the above

Correct Answer

verifed

verified

The balance sheet category "Intangible Assets" includes:


A) patents, trademarks, and franchises.
B) equipment, land, and buildings.
C) investments, receivables, and cash.
D) goodwill, inventory, and vehicles.

E) B) and C)
F) B) and D)

Correct Answer

verifed

verified

Company A uses an accelerated depreciation method while Company B uses the straight-line method.All other things being equal,during the first few years of the asset's use,Company B will show which of the following compared to Company A?


A) A smaller fixed asset turnover ratio and a smaller gain on asset disposal
B) A larger fixed asset turnover ratio and a larger gain on asset disposal
C) A smaller fixed asset turnover ratio and a larger gain on asset disposal
D) A larger fixed asset turnover ratio and a smaller gain on asset disposal

E) B) and D)
F) A) and C)

Correct Answer

verifed

verified

Which of the following statements regarding goodwill is not correct?


A) Goodwill is not amortized.
B) Goodwill is tested annually for impairment.
C) Goodwill is written down if its value is found to be impaired.
D) Private companies amortize goodwill using the straight-line method over 20 years or less.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

A company would most likely choose the double-declining balance depreciation method for which of the following long-lived tangible assets?


A) Vehicles
B) Office buildings
C) Warehouses
D) Land improvements

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

Your company rents computers to local businesses and schools.You have 1,000 computers with a book value of $160,000.As a result of changing technology,your computers are more difficult to rent so you must drastically reduce your rental price,which causes a decrease in estimated future cash flows.The fair value of the computers is estimated to be $125,000 because of their outdated technology.Your company should report an asset impairment loss of:


A) $160,000.
B) $125,000.
C) $35,000.
D) $0.

E) A) and C)
F) B) and C)

Correct Answer

verifed

verified

A company sells equipment for $450,000 when the book value of the equipment is $400,000.The company would record the extra $50,000 as:


A) a gain, increasing net income and stockholders' equity.
B) revenue, increasing net income and stockholders' equity.
C) expenses, decreasing net income and stockholders' equity.
D) a loss, decreasing net income and stockholders' equity.

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

If Company A has a contractual right to sell certain products or services,use certain trademarks,or perform activities in a certain geographical regions,then Company A has:


A) a trademark.
B) a copyright.
C) goodwill.
D) a franchise.

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

Showing 1 - 20 of 266

Related Exams

Exam 1

Business Decisions and Financial Accounting

211 Questions

Exam 2

Reporting Investing and Financing Results on the Balance Sheet

193 Questions

Exam 3

Reporting Operating Results on the Income Statement

235 Questions

Exam 4

Adjustments,financial Statements,and Financial Results

246 Questions

Exam 5

Fraud, Internal Control, and Cash

188 Questions

Exam 6

Internal Control and Financial Reporting for Cash and Merchandising Operations

210 Questions

Exam 7

Reporting and Interpreting Inventories and Cost of Goods Sold

214 Questions

Exam 8

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

230 Questions

Exam 10

Reporting and Interpreting Liabilities

235 Questions

Exam 11

Reporting and Interpreting Stockholders Equity

253 Questions

Exam 12

Reporting and Interpreting the Statement of Cash Flows

208 Questions

Exam 13

Measuring and Evaluating Financial Performance

170 Questions

Show Answer