Accounting I-investment-tangible-intangible

Generally, investments are classified in the balance sheet as

• Current asset

• Non-current asset

• either current asset or non-current assets

• none of the above

It encompasses any instrument representing ownership shares and rights, warrants or options to acquire or dispose of ownership shares at a fixed or determinable price.

• debt security

• equity security

• redeemable preference shares

• none of the above

The account used to summarize the owner's equity in a business

• account
• expense
• capital
• revenue

___________ are financial assets.

• Bonds

• Machines

• Stocks

• Bonds&Stocks

The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns:

• (a) between 20% and 50% of the investee’s common

  stock.

• (b) 20% or more of the investee’s common stock.

• (c) more than 50% of the investee’s common stock.

• (d) less than 20% of the investee’s common stock.

Which of the following is a tangible asset?

• Goodwill

• Patent

• Franchise

• Equipment

How is goodwill calculated?

• Purchase price + Net Assets

• Purchase price - Net Assets

• Net Assets + fair value of liabilities

• it is not calculated

With what method of depreciation, an asset’s cost is depreciated the same amount for each accounting period?

• Straight line method

• MACRS method

• Declining Balance Method

• Sum of Years Digits

Which of the following is a correct expression about ordinary repair and maintenance activities?

• ordinary repairs and maintenance are part of the asset cost of equipment and facilities.

• ordinary repairs and maintenance are recorded as expenses.

• ordinary repairs and maintenance are improve the asset beyond the current accounting period.

• ordinary repairs and maintenance are are recorded as liabilities.

Which of the following is an example of a capital expenditure?

• Payment of salaries

• Purchase of machinery

• 
  Payment of rent

• 
  Payment of utility bills