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Accounting for Fixed & Intangible Assets Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. When would an accountant write off an asset?

Question 2 2. Three years ago, Java Buzz Coffee Shop purchased an espresso machine for $10,000. To date, the accumulated depreciation is $7,000. Java Buzz Coffee Shop decides to write off the machine because it no longer has a use for it. How should the company account for this in its journal?

Question 3 3. What is the book value of an asset?

Question 4 4. Which statement concerning the units of production method is MOST accurate?

Question 5 5. The Sparkling Mineral Corporation purchased a large plot of land for $225,000 with plans to extract minerals from it. The company believes it can extract 500,000 pounds of minerals from the land. During the first year, the company extracted 30,000 pounds of minerals. What is the amount of depletion expense in the first year?

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Question 6 6. Which of the following accounts is considered a contra-asset account?

Question 7 7. ABC Hardware Group is considering purchasing Harry's Hardware Shop. The book value of Harry's net assets is $800,000, but ABC Hardware Group makes an offer of $1,000,000. This difference is referred to as _____.

Question 8 8. Which of the following assets undergoes amortization?

Question 9 9. In which of the following answer choices is the amount of goodwill $150,000?

Question 10 10. What is the total amount of intangible assets shown in the image below?

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Question 11 11. Patents, trademark logos, and copyrights are all examples of _____.

Question 12 12. Calculate the total amount of fixed assets in the image below.

Question 13 13. Buildings, machines, and land are MOST correctly characterized as _____.

Question 14 14. The tangible items that a business owns that are held on a long-term basis are referred to as _____.

Question 15 15. Which method of reporting depreciation is based on use?

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Question 16 16. Two years ago, CandleWood Manufacturing, LLC purchased a large factory for $900,000. The company estimates that the factory's useful life is 25 years. If company uses the double declining balance method of depreciation, what is the book value of the building at the end of the second year? Assume that the market value of the building is $820,000.

Question 17 17. A coffee shop purchases an espresso machine for $5,000. The machine has a life expectancy of five years. If the coffee shop uses straight-line depreciation, what is the amount of depreciation expense in the second year?

Question 18 18. Which of the following will be reported on a company's income statement as an expense?

Question 19 19. The double declining balance and sum of the years' digits methods are both examples of _____.

Question 20 20. Use the sum of the years' digit method of depreciation to calculate the amount of depreciation that occurs in year one for a machine that cost $75,000 with an expected life of 5 years.

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Question 21 21. Use the double declining balance depreciation method to calculate the amount of depreciation that occurs in the first year for a piece of equipment that cost $28,000 with an expected life of 10 years.

Question 22 22. The process of adjusting the value of a natural resource asset so that it accounts for the removal of that resource during the asset's life is referred to as _____.

Question 23 23. The Flower Company recently purchased a patent for $150,000. The patent originally had a useful life of 15 years. At the time of purchase, the patent had 10 years of useful life remaining. What is the amount of annual amortization The Flower Company would record?

Question 24 24. Which type of asset has a physical form and a significant impact on a business, and is intended to be used over long periods of time?

Question 25 25. A machine that was purchased for $25,000 has an expected useful life of eight years, but the company begins to use it less frequently after six years. The company uses the straight-line method of depreciation. At which point is the book value of the machine $0?

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Question 26 26. What is amortization?

Question 27 27. A building is most appropriately classified as a(n) _____.

Question 28 28. General Automobiles purchased a piece of manufacturing equipment for $450,000. The machine has an estimated life of 15 years. Calculate the book value of the machine at the end of three years if the company depreciates the asset using straight-line depreciation. Assume that the market value of the machine at this time is $400,000.

Question 29 29. What type of asset lacks a physical form?

Question 30 30. Which statement concerning the units of production method of depreciation is MOST accurate?

Accounting for Fixed & Intangible Assets Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Accounting 202: Intermediate Accounting II  /  Business Courses
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