Q3CRM

Property, plant, and equipment and tangible, long-term, and revenue-producing assets which means that they are used for business operations.  

• T

• F

Demolition costs to remove an old building from land purchased are considered part of the cost of the new building.

• T

• F

The acquisition costs of property, plant, and equipment do NOT include

• the ordinary and necessary costs to bring the asset to its desired condition and location for use.

• the net invoice price.

• legal fees, delivery charges, installation, and any applicable tax (except for VAT).

• maintenance costs during the first 30 days of use.

Depreciation is based on the decline in the fair value of the asset.

• T

• F

The units-of-production approach to depreciation is appropriate when depreciation is a function of time instead of activity.

• T

• F

The term "depreciable base," or "depreciation base," or “depreciable cost” as it is used in accounting, refers to

• the total amount to be charged to depreciation expense over an asset's useful life.

• the cost of the asset less the related depreciation recorded to date.

• the estimated fair value of the asset at the end of its useful life.

• the acquisition cost of the asset.

Calculating the gain (loss) on sale from the disposal of an old plant asset considers the selling price versus the carrying amount.

• T

• F

Costs incurred after discovery of a natural resource but before production begins are reported as expenses of the period in which the expenditures are made.

• T

• F

Depletion expense is presented as part of cost of goods sold and is the cost allocation of natural resources

• T

• F

Intangible assets derive their value from the right or claim to receive cash in the future.

• T

• F