Plant Assets, Natural Resources, and Intangibles

All plant assets must be depreciated for accounting purposes.

• True
• False

When purchasing land, the costs for clearing, draining, filling, and grading should be add to the cost of the land.

• True
• False

Once an asset is fully depreciated, no additional depreciation can be taken, even though the asset is still being used by the business.

• True
• False

If the proceeds from the sale of a plant asset exceed its book value, a gain occurs.

• True
• False

Natural resources include patents, copyrights, trademarks, and goodwill.

• True
• False

The cost of a patent should be amortized 

• Over 20 years
• Over its useful life
• Either 20 years or useful life, whichever is less
• Option of 20 years or useful life

Research and development costs should be

• recorded as an asset
• recorded as expenses
• added to the cost of the new product developed
• always paid with cash

Which one of the following would NOT be part of the cost of a truck purchased for business use?

• Sales tax
• Truck license
• Freight charges
• Cost of business lettering on side of truck

The weight room when added onto the high school would be classified as

• land
• land improvements
• buildings
• building improvements

Which of the following is NOT depreciated?

• Land
• Equipment
• Buildings
• Building Improvements