AACA1 CHAPTER 5

Physical Inspection of fixed assets satisfies the following assertions except

• Existence

• Completeness

• Rights and Obligations

• All of the given assertions are satisfied.

To satisfy the completeness assertion, the test of additions and disposals are done.

• True

• False

Property, plant and equipment are initially recognized at

The total cost of PPE includes the following (select all that applies)

• Net purchase price

• Decommissioning cost

• Directly attributable costs

• Present value of decommissioning cost

If PPE is acquired by purchase, net purchase price should be net of cash discounts only if taken.

• True

• False

PPE purchased by lump-sum, should be allocated based on what approach

TRUE or FALSE: Sale of scrap from demolition of old building should be ignored in computing for the cost of new building.

The following should be treated as a change in accounting estimate (select all)

• Depreciation method

• Salvage value

• Estimated useful life

• Initial cost

Expenditures that are expensed when incurred

Expenditures that are capitalized when incurred