WSU Accounting 230 Exam 3 Questions And Answers Rated A+ 2024.
Recording an expenditure as an asset if it increases future benefits; if it only increase benefits during the current period then we label it as an expense. - correct answer. What does the term "capitalize" mean?
Land,...
Recording an expenditure as an asset if it increases future benefits; if it only increase
benefits during the current period then we label it as an expense. - correct answer.
What does the term "capitalize" mean?
Land, land improvements, buildings, equipment, and natural resources. - correct
answer. What is included in Plant, Property, and Equipment?
The long term asset at its cost, plus all expenditures necessary to prepare the asset for
use. - correct answer. What is included in the value of a long-term asset to record
on the balance sheet?
Purchase price of land, commissions, back property taxes, title insurance, cost of
removing an existing building, cost of leveling the land, less: salvaged materials. -
correct answer. When purchasing land, how do you calculate the amount to be
recorded?
$6,000. - correct answer. If $8,000 ($6,000 in back taxes and $2,000 due for the
current fiscal year) in Property Taxes are paid on a price of land after purchase, what
amount is included in the total cost of the land?
No; since land improvements (sprinklers, sidewalks, driveway, etc.) do not last forever,
they are not included. - correct answer. Are land improvements recorded with land?
The purchase of more than one asset at the same time for a single purchase price. -
correct answer. What is a basket purchase?
Estimated Fair Value x Allocation Percentage x Basket Purchase Cost = Recorded
Amount - correct answer. How do you determine the value of individual accounts
from a basket purchase?
Copyrights, patents, franchises, trademarks, and goodwill. - correct answer. What
are types of Intangible Assets?
1. Purchase Intangible Assets from other companies.
2. Develop Intangible Assets internally. - correct answer. How can companies
acquire Intangible Assets (2 different ways)?
, The original cost plus all other costs (such as legal fees) necessary to prepare the asset
for use; recorded under assets. - correct answer. How do you record/value
Intangible Assets that are purchased from other companies to record?
Expense the costs for developing the intangible asset as you incur the costs. - correct
answer. How do you record Intangible Assets that are developed internally?
Additions, improvements (replacements), major repairs that increase future benefits,
and legal defense of intangible assets. - correct answer. What expenditures are
*capitalized* after the acquisition of an asset?
Routine repairs and maintenance. - correct answer. What expenditures are
*expensed* after the acquisition of an asset?
Expensed as they are incurred. - correct answer. How are research and
development costs recorded?
A contra-asset account. - correct answer. What type of account is Accumulated
Depreciation?
(Asset's Cost - Residual Value) / Service Life - correct answer. How do you
calculate annual depreciation expense?
Patents, copyrights, trademarks, and franchises. - correct answer. Which intangible
assets are subject to amortization?
Goodwill and trademarks. - correct answer. Which intangible assets are not subject
to amortization?
Sale Amount - Book Value (Book Value = Original Cost - Accumulate Depreciation) =
Gain or Loss - correct answer. How do you calculate the gain or loss on the disposal
(sale, retirement, exchange) of an asset?
Debit: Cash
Debit: Accumulated Depreciation
Credit: Equipment
Credit: Gain - correct answer. Journalize a gain on the sale of equipment.
Debit: Cash
Debit: Accumulated Depreciation
Debit: Loss
Credit: Equipment - correct answer. Journalize a loss on the sale of equipment.
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