Question : 1. Which of the following accounts would not be reported in : 1224932

1. Which of the following accounts would not be reported in the property, plant, and equipment section of a balance sheet? A. Accumulated depreciation–buildingsB. BuildingsC. Depreciation Expense–buildingsD. Land

2. Which of the following costs related to the purchase of production equipment incurred by ABC Company during 2011 would be considered a revenue expenditure? A. Installation costs for equipmentB. Purchase price of the equipment less the cash discountC. Repair and maintenance costs during the equipment’s first year of serviceD. Transportation charges to deliver the equipment to ABC Company

3. On the balance sheet, the cumulative amount of depreciation expense recognized to date on a fixed asset is called: A. accumulated amortization.B. accumulated depreciation.C. amortization expense.D. depreciation expense.

4. Able Company purchased land and incurred the following costs: 

Purchase price

$1,000,000

Excavation costs

100,000

Razing old building

25,000

Broker fees

20,000

Cost of property taxes

50,000

What is the cost of the land? A. $1,100,000B. $1,195,000C. $1,145,000D. $1,125,000

5. Depreciation is a process by which: A. replacement funds are accumulated for plant and equipment.B. the decline in market value of plant and equipment is determined and recorded.C. the cost of plant and equipment is allocated to expense over its useful life.D. the difference between current market value and historical cost of plant and equipment is recorded.

6. Land is not depreciated because: A. it appreciates in value.B. its revenue generating potential is limited by wear and tear.C. it has a useful life that is limited to the period of time a company is in business.D. it will provide future benefits for the company for an unlimited period of time.

7. Assets classified as property, plant, and equipment are reported at: A. each asset’s estimated market value less depreciation on the balance sheet date.B. each asset’s estimated market value on the balance sheet date.C. the estimated salvage value on the balance sheet date.D. each asset’s original cost less depreciation since acquisition.

8. Depreciation is: A. the process of systematically and rationally allocating the cost of a fixed asset over its useful life. B. an accumulation of funds to replace the related plant asset.C. the difference between the replacement cost and salvage value of an asset.D. the cash allocated each period to maintain a plant asset.

9. The effect of recording depreciation for the year is a(n): A. decrease in assets and a decrease in net income.B. decrease in assets but no change in owners’ equity.C. increase in assets and an increase in net income.D. decrease in net income and no change to assets.

10. Plant assets are depreciated because: A. the accrual basis of accounting requires matching of costs to revenues.B. cash basis of accounting requires depreciation.C. the book values equal market values.D. the replacement cost of plant assets may fluctuate over time.