Question :
91. Which of the following not true regarding expenditures for improvements? A. Improvements : 1230671
91. Which of the following is not true regarding expenditures for improvements?
A. Improvements are sometimes called betterments
B. Improvements may increase an asset’s performance by increasing the service life.
C. Improvements may increase an asset’s performance by reducing the operating costs.
D. Improvements may increase an asset’s performance by increasing the rate of output.
E. none of the above
92. Epsilon Company suffers a loss to its building in a fire and spends $100,000 on repairs and improvements. It judges that $80,000 of the expenditure replaces long-lived assets lost in the fire, and $20,000 represents improvements to the building. Epsilon Company makes the following single journal entry.
A. Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
B. Loss from Fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
C. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Loss from Fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
D. Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Loss from Fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
E. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Loss from Fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
93. Which of the following is/are true regarding the fair value of long-lived assets?
A. U.S. GAAP does not permit firms to increase the balance sheet carrying values of tangible and intangible long-lived assets when the fair values of their assets increase.
B. IFRS permits upward asset revaluations, the recognition of unrealized increases in the fair value of tangible and intangible long-lived assets under certain conditions.
C. IFRS requires that firms credit the increase in the tangible and intangible revalued asset’s balance sheet carrying value to other comprehensive income,
D. U.S. GAAP firms recognize the increase in the fair value of the tangible and intangible asset only as the firm realizes the value increase through either sale or continuing use.
E. all of the above
94. Which of the following is/are not true regarding the fair value of long-lived assets?
A. U.S. GAAP does not permit firms to increase the balance sheet carrying values of tangible and intangible long-lived assets when the fair values of their assets increase.
B. IFRS permits upward asset revaluations, the recognition of unrealized increases in the fair value of tangible and intangible long-lived assets under certain conditions.
C. IFRS requires that firms credit the increase in the tangible and intangible revalued asset’s balance sheet carrying value to net income,
D. U.S. GAAP firms recognize the increase in the fair value of the tangible and intangible asset only as the firm realizes the value increase through either sale or continuing use.
E. all of the above
95. Gamma Corporation replaces a roof damaged in a hurricane. The new roof is purposefully designed to be stronger than the old one so that it will support the air conditioning equipment the firm plans to install. Which of the following is/are true?
A. Part of the expenditure represents repair and part represents improvement.
B. The expenditure represents repair, only.
C. The expenditure represents improvement, only.
D. The expenditure represents asset, only.
E. The expenditure represents expense, only
96. Which of the following is/are true regarding measuring changes in the fair values of long-lived assets?
A. U.S. GAAP requires firms to recognize decreases in fair values as an impairment loss, and to recognize unrealized increases in fair values.
B. IFRS requires firms to recognize decreases in fair values as an impairment loss, and to never recognize unrealized increases in fair value.
C. U.S. GAAP requires firms to not recognize decreases in fair values, but to recognize unrealized increases in fair value.
D. IFRS requires firms to not recognize decreases in fair values, but to recognize unrealized increases in fair value.
E. U.S. GAAP and IFRS requires firms to recognize decreases in fair values as an impairment loss, and differ as to the recognition of unrealized increases in fair values.
97. U.S. GAAP and IFRS distinguish three categories of long-lived assets for purposes of measuring and recognizing impairment losses. The first category addresses long-lived assets except intangible assets not subject to amortization and goodwill. This category does not include:
A. property, plant, and equipment.
B. patents.
C. franchise rights.
D. land.
E. brand names and trademarks.
98. U.S. GAAP and IFRS distinguish three categories of long-lived assets for purposes of measuring and recognizing impairment losses. The second category addresses intangibles, other than goodwill, not subject to amortization. This category does not include:
A. brand names.
B. trademarks.
C. franchise rights.
D. renewable licenses.
E. none of the above
99. U.S. GAAP and IFRS distinguish three categories of long-lived assets for purposes of measuring and recognizing impairment losses. The second category addresses intangibles, other than goodwill, not subject to amortization. This category does not include:
A. brand names.
B. trademarks.
C. franchise rights.
D. renewable licenses.
E. none of the above
100. Under U.S. GAAP and IFRS reporting standards, management assesses the firm’s assets for impairment at each reporting date by determining if impairment indicators are present. Impairment indicators include
A. the decline in the market value of an asset significantly beyond what would be expected because of use or the passage of time.
B. significant adverse changes in the entity’s technological environment;
C. significant adverse changes in the entity’s economic environment;
D. significant adverse changes in the entity’s legal environment;
E. all of the above
