WorksheetsIA2-Learning Activity 01 LM01
Total questions: 15
Worksheet time: 5mins
Tangible assets that are held for use in business that are expected to be used for more than one year.
Property, Plant and Equipment (Fixed Assets)
When several assets are acquired at a lumpsum price, it is necessary to apportion the single price to the assets acquired on the basis of relative _____________.
Appraised value
salvage value
Fair value
Carrying value
When an asset is acquired on account subject to discount, the cost of the asset is equal to
Present value of cash payments
List price
Net invoice price less discount when taken
Net invoice price less discount
What is the preferred cost basis when payment for the property is deferred beyond normal credit terms?
Cash price equivalent
Present value of all payments
Future value of all payment
Net invoice price
If property is acquired through the issuance of share capital, the property shall be measured at an amount equal to
Cash price equivalent
Par value or stated value of the share capital
Fair value of share capital
Fair value of the property received
When an entity acquires an asset by issuing bonds payable, the asset acquired is measured preferably at
Fair value of the bonds
Cash price equivalent
Face value of the bonds payable
Fair value of the property received
If the exchange transaction lacks commercial substance, the acquired PPE is measured at the
Fair value of the property given
Carrying amount of the asset received
Carrying amount of the asset given
Fair value of the property received
If the property is acquired in an exchange with commercial substance, the cost is equal to
Fair value of the property given
Fair value of the asset given plus cash payment
Fair value of the asset given minus cash received
Fair value of the property given or received whichever is more clearly determinable
Capitalizable make-ready costs related to a new machine do not include
a. rearrangement costs related to the machine
cost of training employees to use the machine
installation costs
nonrefundable taxes related to the machine
Capitalizable make-ready costs related to a new machine do not include
a. rearrangement costs related to the machine
cost of training employees to use the machine
installation costs
nonrefundable taxes related to the machine
In an exchange transaction that has commercial substance, the gain or loss on exchange is
not recognized
the difference between the fair value and the carrying value of the asset given up
the difference between the carrying value of asset given up and the carrying value of asset received.
the difference between the fair value of the asset given up and the amount of cash received or paid
A company purchased land to be used as the site for the construction of a building. Timber was cut from the building site so that construction could begin. The proceeds from the sale of the timber should
deducted from the cost of the land
deducted from the cost of the building
netted against the costs to clear the land and expensed as incurred
classified as other income
The cost of PPE comprises all of the following, except
purchase price
Import duties and nonrefundable purchase taxes
any cost directly attributable in bringing the asset to location and condition for the intended use
initial estimate of the cost of dismantling the asset for which the entity has no present obligation
In the case of grant related to an asset, which of the following accounting treatment is prescribed?
record the grant income in the first year
either set up the grant as deferred income or deduct it in arriving at the carrying amount of an asset
record as grant income in the next year
disclose only
Which is not a condition that must be satisfied before interest capitalization can begin on a qualifying asset?
activities necessary to get the asset ready for intended use are in progress
the interest rate is equal to or greater than the cost of capital
expenditures for the asset have been made
interest is being incurred
