Plant Assets And Intangibles

Front 1

The cost of land includes the cost of removing unwanted buildings

Back 1

True

Front 2

Treating a capital expenditure as an expense causes an understatement of net income.

Back 2

True

Front 3

Tangible assets are assets with no physical form that have value because of the special rights they carry.

Back 3

False

Front 4

Estimated residual value is the expected cash value of an asset at the end of its useful life.

Back 4

True

Front 5

The straight-line method of depreciaion assigns a fixed amount of depreciation to each unit of output produced by an asset.

Back 5

False

Front 6

Accelerated depreciation differs from straight line depreciation in that depreciation expense is greater in the first year and less in the later years.

Back 6

True

Front 7

The units-of-production method of depreciation always writes off more of the asset's cost near the start of its useful life than the declining-balance method.

Back 7

False

Front 8

The double-declining balance method of depreciation computes annual depreciation by multiplying the asset's decreasing book value by a constant percent that is two times the straight-line rate.

Back 8

True

Front 9

For tax purposes, accelerated depreciation is generally preferable to straight-line because accelerated depreciation reduces taxable income and taxes due.

Back 9

True

Front 10

A loss on the sale of a plant asset is recorded when the sales price exceeds the book value.

Back 10

False

Front 11

A gain on the exchange of a plant asset is not recorded, but results in a smaller basis in the new asset received.

Back 11

True

Front 12

Depletion expense is the portion of a natural resource's cost used up in a particular period.

Back 12

True

Front 13

Accumulated depletion is a contra-liability account.

Back 13

False

Front 14

Goodwill is not amortized, but evaluated each year for a decline in value.

Back 14

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