matching questions 139 match each of the following terms with the appropriate defini 4299768

 

Matching Questions

139. Match each of the following terms with the appropriate definitions. 

1. Change in accounting estimate 

     The amount by which the company's value exceeds the value of its individual assets and liabilities. 

   

2. Depletion 

     An expenditure reported on the current income statement as an expense because it does not provide a material benefit in future periods. 

   

3. Total asset turnover 

     An expenditure to make a plant asset more efficient or productive. 

   

4. Intangible assets 

     A method that yields larger depreciation expense during the early years of an asset's life and smaller expense in the later years. 

   

5. Ordinary repairs 

     Expenditures made to keep a plant asset in normal, good operating condition. 

   

6. Goodwill 

     The process of allocating the cost of natural resources to periods when they are consumed. 

   

7. Accelerated depreciation 

     A measure of a company's ability to use its assets to generate sales. 

   

8. Units-of production method 

     A change in a financial statement amount that results from new information, subsequent developments, better insight, or improved judgment. 

   

9. Revenue expenditure 

     A depreciation method that charges a varying amount to expense for each period of an asset's useful life depending on its usage. 

   

10. Betterment 

     Certain nonphysical assets used in operations that confer on their owners long-term rights, privileges, or competitive advantages. 

   

 

 

121 huffington company traded in an old delivery truck for a new one the old truck h 4299769

 

121. Huffington Company traded in an old delivery truck for a new one. The old truck had a cost of $75,000 and accumulated depreciation of $60,000. The new truck had an invoice price of $125,000. Huffington was given a $12,000 trade-in allowance on the old truck, which meant they paid $113,000 in addition to the old truck to acquire the new truck. If this transaction has commercial substance, what is the recorded value of the new truck? 

A. $15,000

B. $75,000

C. $113,000

D. $125,000

E. $128,000

122. A company bought a new display case for $42,000 and was given a trade-in of $2,000 on an old display case, so the company paid $40,000 cash with the trade-in. The old case had an original cost of $37,000 and accumulated depreciation of $34,000. If the transaction has commercial substance, the company should record the new display case at: 

A. $2,000.

B. $3,000.

C. $40,000.

D. $42,000.

E. $43,000.

123. A company purchased a machine valued at $66,000. It traded in an old machine for a $9,000 trade-in allowance and the company paid $57,000 cash with the trade-in. The old machine cost $44,000 and had accumulated depreciation of $36,000. This transaction has commercial substance. What is the recorded value of the new machine? 

A. $8,000.

B. $9,000.

C. $57,000.

D. $65,000.

E. $66,000.

124. All of the following statements regarding increases in the value of plant assets under U.S. GAAP and IFRS are True except

A. U.S. GAAP prohibits companies to record increases in the value of plant assets.

B. IFRS permits upward asset revaluations.

C. Under IFRS, a company can reverse an impairment and record that increase in income.

D. Under U.S. GAAP, a company can reverse an impairment and can include it in comprehensive income.

E. Under IFRS, an impairment increase beyond as asset's original cost can be recorded in comprehensive income.

125. Marble Company purchased a machine costing $120,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $2,000. The machine requires special mounting and wiring connections costing $10,000. When installing the machine, $1,300 in damages occurred. Materials costing $1,500 are used in testing and adjusting the machine to produce a satisfactory product. Compute the cost recorded for this machine assuming Marble paid within the discount period. 

A. $131,100.

B. $134,800.

C. $132,300.

D. $133,600.

E. $130,300.

126. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the straight-line method. 

A. $16,900.

B. $16,000.

C. $17,400.

D. $18,379.

E. $20,880.

127. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the double-declining-balance method. 

A. $16,900.

B. $16,000.

C. $17,400.

D. $18,379.

E. $20,880.

128. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the units-of-production method. 

A. $16,900.

B. $16,000.

C. $17,400.

D. $18,379.

E. $20,880.

129. Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. What journal entry would be needed to record the machines' second year depreciation under the units-of-production method? 

A. Debit Depletion Expense $16,900; credit Accumulated Depletion $16,900.

B. Debit Depletion Expense $16,000; credit Accumulated Depletion $16,000.

C. Debit Depreciation Expense $16,900; credit Accumulated Depreciation $16,900.

D. Debit Depreciation Expense $16,000; credit Accumulated Depreciation $16,000.

E. Debit Amortization Expense $16,900; credit Accumulated Amortization $16,900.

130. Carmel Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. Compute the depletion expense for the first year assuming 418,000 tons were mined. 

A. $1,233,100.

B. $1,358,500.

C. $1,300,000.

D. $1,180,000.

E. $1,280,000.

 

184 select the appropriate financial statement for each of the following items note 4299773

 

184. Select the appropriate financial statement for each of the following items.

(Note: some items may appear on more than one financial statement.) 

1. Statement of cash flows 

     Supplies 

   

2. Income statement 

     Cash withdrawals by owner. 

   

3. Income statement 

     Ahmad Khan, Capital 

   

4. Statement of cash flows 

     Advertising Expense 

   

5. Balance sheet 

     Cash payments to purchase equipment 

   

6. Statement of owner's equity, Balance sheet 

     Cash investments by owner 

   

7. Statement of owner's equity, Statement of cash flows 

     Consulting Revenue 

   

8. Statement of owner's equity, Statement of cash flows 

     Cash proceeds from a long-term loan 

   

 

 

185. Classify the following activities according to the appropriate section of the statement of cash flows. 

1. Investing activity 

     Cash received from a one-time sale of used office equipment. 

   

2. Operating activity 

     Cash paid for withdrawals by owners. 

   

3. Financing activity 

     Cash received from customers. 

   

4. Operating activity 

     Cash received from owner contributions. 

   

5. Investing activity 

     Cash paid for utilities. 

   

6. Financing activity 

     Cash paid for a delivery van to be used in the business. 

   

 

 

140 match each of the following terms with the appropriate definitions 1 copyright a 4299774

 

140. Match each of the following terms with the appropriate definitions. 

1. Copyright 

     An estimate of an asset's value at the end its benefit period. 

   

2. Obsolescence 

     Major repairs that extend the useful life of a plant asset beyond its original estimate. 

   

3. Book value 

     The process of allocating the cost of an intangible asset to expense over its estimated useful life. 

   

4. Amortization 

     A right granted that gives its owner the exclusive privilege to publish and sell musical, literary, or artistic work during the life of the creator plus 70 years. 

   

5. Depletion 

     A condition which, because of new inventions and improvements, a plant asset is no longer useful in producing goods or services with a competitive advantage. 

   

6. Salvage value 

     The total cost of a plant asset less its accumulated depreciation. 

   

7. Extraordinary repairs 

     The process of allocating the cost of natural resources to the periods when they are consumed. 

   

8. Patent 

     An exclusive right granted to its owner to manufacture and sell an item, or to use a process, for 20 years. 

   

9. Land improvements 

     The insufficient capacity of plant assets to meet the company's productive demands. 

   

10. Inadequacy 

     Assets that increase the benefits of land, have a limited useful life, and are subject to depreciation. 

   

 

 

242 the owner 39 s claim on assets is called 243 the accounting equation is 4299775

 

242. The owner's claim on assets is called _________________. 

243. The accounting equation is _____________________________. 

244. The term __________________ refers to a liability that promises a future outflow of resources. 

245. Using the accounting equation, equity is equal to _______________________. 

246. ______________________ is the recording of financial transactions and events, either manually or electronically. 

247. _________________ is net income divided by average total assets. 

248. Risk is the _________________ about the return an investor expects to earn. 

249. ________________________________ reports changes in the owner's claim on the business's assets over a period of time. 

250. The ____________________ describes a company's revenues and expenses over a period of time due to earnings activities.