Corporate Accounting: Chapter 09 (PPE)

Property, plant and equipment are assets held for sale.

• True

• False

Non-current assets are any liabilities that are used in the operations of a business.

• True

• False

Revenue expenditures are additional costs of property, plant and equipment that provide material benefits extending beyond the current period.

• True

• False

Revenue expenditures are expenditures to keep assets in normal operating condition.

• True

• False

SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to Store Building.

• True

• False

Depreciation is the process of allocating the cost of a tangible asset in a rational and systematic manner over the asset's estimated useful life.

• True

• False

Because land has unlimited life, it is not subject to depreciation. Therefore, items that increase the usefulness of the land such as parking lots are also not depreciated.

• True

• False

Machinery having a four-year useful life and a residual value of $5,000 was acquired for $65,000 cash on June 28. Using the nearest whole month method, the company would recognize $11,250 for depreciation expense at the end of the first year, December 31.

• True

• False

A depreciable asset that is purchased on March 18 would be depreciated for nine months of the first year, if the fiscal year ends on December 31 using nearest whole month method

• True

• False

Machinery after two years worth of depreciation has an opening book value of $6,400. At the beginning of the third year, the predicted number of years remaining in its useful life changes from three years to four years and its estimated residual value changes from the original $1,000 to $400. The revised annual depreciation using the straight-line method is $ 1,500

• True

• False