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1 | |
The following information relates to questions 1 through 4. An asset cost $100,000 and is expected to have an economic life of 10 years with a residual value of $10,000.
What is the depreciation expense in the first full year if the double-declining balance method of depreciation is used? |
| | A) | $10,000 |
| | B) | $9,000 |
| | C) | $20,000 |
| | D) | $18,000 |
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2 | |
What is the book value of the asset after the first full year if the double-declining balance method of depreciation is used? |
| | A) | $90,000 |
| | B) | $91,000 |
| | C) | $80,000 |
| | D) | $82,000 |
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3 | |
What is the book value of the asset after the second full year if the double-declining balance method of depreciation is used? |
| | A) | $72,000 |
| | B) | $64,000 |
| | C) | $68,000 |
| | D) | Some other amount |
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4 | |
What is the book value of the asset after the tenth full year if the double-declining balance method of depreciation is used? |
| | A) | 0 |
| | B) | 8,000 |
| | C) | 10,000 |
| | D) | Some other amount |
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5 | |
In the first full year of depreciating an asset, which method will yield the greatest depreciation expense? |
| | A) | Straight-line |
| | B) | Double-declining balance |
| | C) | Units-of-output |
| | D) | More information is need to determine the answer |
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6 | |
Intangible assets are: |
| | A) | Depleted |
| | B) | Amortized |
| | C) | Depreciated |
| | D) | Declined |
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7 | |
What is the legal life of a copyright? |
| | A) | 10 years |
| | B) | 17 years |
| | C) | 28 years |
| | D) | The life of the creator plus 50 years |
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8 | |
What is the legal life of a patent? |
| | A) | 10 years |
| | B) | 17 years |
| | C) | 28 years |
| | D) | The life of the creator plus 50 years |
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9 | |
What is the maximum period of time allowed to amortize an intangible according to the FASB? |
| | A) | The economic life of the asset |
| | B) | 50 years |
| | C) | 40 years |
| | D) | The FASB made no pronouncement |
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10 | |
Capital expenditures are: |
| | A) | Always financed through capital stock |
| | B) | Are expensed as incurred |
| | C) | Are for the purchase or expansion of plant assets |
| | D) | Are also known as revenue expenditures |
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