AC210 - Chapter 7 Part One (UA)

What is the correct way to categorize and record tangible and intangible assets?

• Expense the immediately

• Capitalize them

• Ignore them

• Record only tangible assets

When should a cost be capitalized rather than expensed?

• If it benefits future periods

• If it only benefits the current period

• If the cost is small

• Always expense improvements

What is the process of spreading the cost of an intangible asset over its useful life?

• Depreciation

• Amortization

• Expensing

• Disposal

Which of the following is a tangible asset?

• Goodwill

• Patent

• Equipment

• Franchise

Which is an example of an intangible asset?

• Building

• Land

• Trademark

• Natural Resources

What is true about long-term assets?

• They are used for over a year and not intended for resale

• They are sold within one year

• They are expensed immediately

• They don't need to be capitalized

How are capitalized costs reported?

• On the income statement

• On the balance sheet

• In the notes

• They aren't reported

Draw me a flower please :)

What's your favorite candy/snack?

What cost is not included in the capitalization of land?

• Purchase price

• Real estate commissions

• Property taxes after the first year

• Clearing and leveling the land