Accounting Book 9 Questions and Answers
Tangible assets are first recorded at ______.
all costs to acquire them and prepare them for use
Which of the following would cause the balance sheet to appear stronger and income statement to appear more profitable than it should?
Capitalizing cos...
Accounting Book 9 Questions and
Answers
Tangible assets are first recorded at ______. - answer all costs to acquire them and
prepare them for use
Which of the following would cause the balance sheet to appear stronger and income
statement to appear more profitable than it should? - answer Capitalizing costs that
should be expensed.
Cedar Fair purchased land; which of the following should be debited to the Land
account? - answer Legal fees for the land's title search
Commissions paid to brokers when purchasing the land
Fees for surveying of the land
Which of the following is a long-lived asset? - answer Land on which to build a new
store
Sunny Sky paid $30,000 cash for piece of land to be used for a new corporate
headquarters building. What is the effect of this transaction on the accounting equation?
- answer One asset increases, while another asset decreases.
Sunny Skys, Inc. bought a derelict hunting lodge, which it tore down at a cost of
$45,000 and replaced with a new lodge. The demolition cost should be ______.
Multiple choice question. - answer capitalized
In the case of a basket purchase, the cost of the land and building is ______. - answer
split among the assets purchased in proportion to the market value of the assets as a
whole
Executives at WorldCom committed an $11 billion fraud by capitalizing costs that should
have been expensed. What was the effect of this fraud on WorldCom's balance sheet?
(Check all that apply.) - answer Total assets were too high.
Retained earnings were too high
Which of the following is true? - answer Capitalized costs increase long-lived assets.
Long-lived assets are ______. (Check all that apply.)
Multiple select question. - answer used by the business
assets acquired for use over 1 or more years
, Thermal, Inc. bought a new computer system for $50,000 cash. What is the effect of this
purchase on the company's total assets? Total assets ______. - answer remain the
same
The Three Little Pigs purchased three houses for a total cost of $160,000. Appraisal
values for the three completed houses were: straw house, $40,000; wood house
$60,000; and brick house $100,000. Using the basket purchase allocation, the recorded
value of the brick house should be ______. - answer $80,000
X-it Company, signed a $500,000, 5-year note payable to buy a new industrial machine.
The company paid $2,000 cash for transportation of the machine and $1,000 cash for
installation costs. The journal entry to record this transaction will include a ______.
(Check all that apply.) - answer $3,000 credit to Cash
$500,000 credit to Note Payable
$503,000 debit to Machinery
Miss Hap, the company bookkeeper, recorded the annual repair costs on the company's
machinery as an increase to the machinery account. As a result, which of the following
is true? (Check all that apply.) - answer Assets will be overstated.
Stockholders' equity will be overstated.
Cedar Fair purchased land; which of the following should be debited to the Land
account? - answer Legal fees for the land's title search
Commissions paid to brokers when purchasing the land
Fees for surveying of the land
X Circle Company purchased a computer system Black Box, Inc. with a list price of
$100,000 plus 5% sales tax. The cost to deliver and install the computer was $10,000.
The debit to Equipment equals - answer $115,000
A productive asset ______. - answer is used to produce goods or services that will
be sold to customers
Revenue expenditures are recorded with a debit to ______. - answer an expense
when they relate to ordinary repairs and maintenance
Sunny Sky paid $30,000 cash for piece of land to be used for a new corporate
headquarters building. What is the effect of this transaction on the accounting equation?
- answer One asset increases, while another asset decreases.
Computit bought a new copier machine. Which of these costs should be expensed?
(Check all that apply.) - answer Replacement of the toner for the copy machine
Annual maintenance cost
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