Intacc 1 THEORIES Chapter 23-32 MCQ (2024)

Which is not a characteristic of property, plant and equipment?

• The property, plant and equipment are tangible assets.

• The property, plant and equipment are used in business

• The property, plant and equipment are expected to be used over a period of more than one year.

• The property, plant and equipment are subject to depreciation.

What valuation model should an entity use to measure property, plant and equipment?

• The revaluation model or the fair value model

• The cost model or the revaluation model

• The cost model or the fair value through OCI

• The cost model or the fair value model

The cost of property, plant and equipment comprises all of the following, except

• Purchase price

• Import duties and nonrefundable purchase taxes

• Any cost directly attributable in bringing the asset to the location and condition for the intended use

• Initial estimate of the cost of dismantling the asset for which the entity has no present obligation.

Costs directly attributable to the asset include all, except

• Initial operating loss

• Cost of site preparation

• Initial delivery and handling cost

• Installation and assembly cost

Which cost should not be expensed immediately?Cost of opening a new facility

• Cost of opening a new facility

• Cost of introducing a new product or service, including cost of advertising and promotional activities

• Cost of conducting business in a new location

• Cost of testing whether the asset is functioning properly

A nonmonetary exchange is recognized at fair value of the asset exchanged unless

• Exchange has commercial substance

• Fair value is not determinable

• The assets are similar in nature

• The assets are dissimilar

In an exchange with commercial substance

• Gain or loss is recognized entirely.

• Gain or loss is not recognized.

• Only gain should be recognized.

• Only loss should be recognized.

The cost of property, plant and equipment acquired in an exchange is measured at the

• Fair value of the asset given plus cash payment.

• Fair value of the asset received plus cash payment.

• Carrying amount of the asset given plus cash payment.

• Carrying amount of the asset received plus the cash payment.

Which exchange has commercial substance?

• Exchange of assets with no difference in future cash flows.

• Exchange by entities in the same line of business.

• Exchange of assets with difference in future cash flows.

• Exchange of assets that causes the entities to remain in essentially the same economic position.

For a nonmonetary exchange, the configuration of cash flows includes which of the following?

• The implicit rate, maturity date of loan and amount of loan

• The risk, timing and amount of cash flows of the assets

• The entity-specific value of the asset

• The estimated present value of the assets exchanged