# ACCT MCQ'S (ALL CORRECT) 52 QUESTIONS - 87649

Solution Posted by

## anjis_devis

Rating : (21)B
Solution Detail
Price: \$20.00
• Posted on: Sat 31 Jan, 2015
• Request id: None
• Purchased: 0 time(s)
• Average Rating: No rating
Request Description
Solution Description

1. If a capital expenditure is treated as a revenue expenditure, then __________.

a. expenses are overstated and stockholders\' equity is understated

b. expenses are overstated and assets are overstated

c. expenses are understated and stockholders\' equity is overstated

D. net income is overstated and stockholders\' equity is understated
2. A company acquired some land for \$80,000 to construct a new office complex. Legal fees paid were \$2,300, delinquent real estate taxes assumed were \$3,400 and \$5,850 was paid to remove an old building from which salvaged materials were sold for \$950. What is the cost of acquiring the land?

a.\$90,600

b.\$91,550

c.\$88,150

d.\$87,200

3. Which of the following is true with regard to depreciation recorded on the books of a company?

a.It represents the periodic transfer of the cost of a fixed asset to expense.

b.It represents the difference between the book value and market value of an asset.

c.It represents the amount retained to replace fixed assets as they wear out.

d.It represents the decline in market value of an asset.
4. A machine was purchased for \$45,000. It has an estimated useful life of 6 years and an estimated residual value of \$6,000. What is annual depreciation expense under the straight-line method?

a. \$7,500

b. \$15,000

c. \$3,750

d. \$6,500
5. Which of the following factors are used in computing depreciation expense using the straight-line method? Residual value Useful life Market value Initial cost

a. Yes Yes No Yes

b. Yes Yes Yes Yes

c. Yes No No Yes

d. No Yes Yes No
6. Pansy Co. purchased mining rights of an existing gold mine for \$10,000,000 on January 1, 2013. The mine is estimated to contain 400,000 ounces of gold. If Pansy extracts 75,000 ounces of gold during 2013, what is the depletion expense for the year ended December 31, 2013? a.\$1,875,000

b.\$1,578,947

c.\$8,421,053

d.\$8,125,000
7. A company sold a delivery truck for \$18,000 cash. The truck was purchased at a cost of \$47,500 and had accumulated depreciation of \$36,000 as of the date of sale. The effect of the sale would include a(n) __________.

a. increase in Accumulated Depreciation for \$36,000

b. decrease in Delivery Truck for \$11,500

c. loss on disposal of asset for \$6,500

d. gain on disposal of asset for \$6,500
8. A company acquired mineral rights for \$10,000,000 which are estimated at 80,000 tons. During the year 15,000 tons were extracted and sold. How much depletion should be recorded for the year?

a. \$5,000,000

b. \$1,875,000

c. \$3,750,000

d. \$2,500,000
9 A patent was purchased for \$670,000 with a legal life of 20 years on January 1, 2013. Management estimates that the patent has an 8-year economic life. The amortization at the end of 2013 would include

Attachments