CHAPTER 9: ACCOUNTING FOR NON-CURRENT ASSETS

Which of the following is not a plant asset?

• Land

• Buildings

• Equipment

• Accounts Payable

Repair work that generates a capital expenditure because its extend the asset's life past the normal expected life is called

• depreciable cost

• extraordinary repair

• revenue expenditure

• asset expenditure

Which of the following is not a factor in calculating depreciation of a plant asset?

• Capitalized cost

• Estimated useful life

• Estimated residual value

• Estimated liability value

A copy machine costs RM45,000 when new and has accumulated depreciation of RM44,000. Suppose Print and Photo Center junks this machine and receives nothing. What is the result of the disposal transaction?

• No gain or loss

• Gain RM1,000

• Loss RM1,000

• Loss RM45,000

Which of the following is not a step during the disposal of an asset?

• Bring the depreciation up to date

• Remove the old and disposes-of asset

• Record the value of accounts payable

• Determine the amount of any gain or loss

Which of the following is not an intangible asset?

• Patents

• Amortization

• Copyrights

• Trademarks

A truck costs RM50,000 when new and has accumulated depreciation of RM35,000. Suppose Wilson Trading exchanges the truck for a new truck. The new truck has a market value of RM60,000 and Wilson pays cash of RM40,000. Assume the exchange has commercial substance. What is the result of this exchange?

• No gain or loss

• Gain of RM5,000

• Loss of RM5,000

• Gain of RM45,000

Which depreciation methods allocates an equal amount of depreciation to each year?

• Straight line method

• Units-of-production method

• Double-declining-balance method

Plant assets are reported on the Balance Sheet at a book value (Cost-Accumulated Depreciation)

• TRUE

• FALSE

Intangible assets are assets that have physical form and non-valuable.

• TRUE

• FALSE