IA CH. 23 Review

1. Which of the following best describes plant assets? 
   

• Assets consumed in one accounting period

• Assets used in the production or sale of goods over multiple periods

• Assets that are always depreciated

• Assets that have no residual value

What is not considered a current asset?

• cash

• accounts receivable

• delivery truck

• office supplies

As plant assets are used, their cost is converted to:

• revenue

• inventory

• expense

• accounts receivable

What accounting principle supports the conversion of asset cost to expense over time?
A. Revenue Principle
B. Matching Principle
C. Full Disclosure Principle
D. Conservatism Principle

• revenue principle

• matching principle

• full disclosure principle

• conservatism principle

1. Land is not depreciated because:
   

• It does not decrease in value

• It is not used in production

• It cannot be sold

• It has no useful life

Which of the following is not required to calculate depreciation?
A. Original cost
B. Accumulated revenue
C. Useful life
D. Estimated disposal value

• original cost

• accumulated revenue

• useful life

• estimated disposal value

6. Which of the following is considered an example of a plant asset?
   A. Accounts Payable
   B. Desk and Chair
   C. Sales Tax Payable
   D. Rent Expense

• accounts payable

• desk and chair

• sales tax payable

• rent expense

Depreciation is considered:

• a liability

• a revenue

• an asset

• an expense

The IRS publishes guidelines on:

• Plant asset financing

• Disposal value and useful life

• Revenue forecasting

• Inventory methods

What does the term "book value" refer to?

• Market value of the asset

• The original cost of the asset

• Asset's cost minus accumulated depreciation

• Asset's resale price