Looking for assistance with this Accounting Quiz. Multiple choice questions. For all essay questions, show your work.
Which of the following items is included in property, plant, and equipment?
A. Buildings and machinery which are idle.
In a lump sum purchase of land, building, and equipment, the components were appraised at $10,000, $20,000, and $30,000, respectively. If $50,000 was paid for the package, how much is assigned to the equipment?
The journal entry to record $100 annual of annual depreciation on a three-year old truck would require:
A. a credit to Accumulated Depreciation for $300.
A graph is set up with “depreciation expense” on the vertical axis and “time” on the horizontal axis. Assuming linear relationships, how would the graphs for straight-line and double-declining balance depreciation, respectively be drawn?
A. Vertically and sloping down to the right.
A new truck is purchased on January 1, 20X6. The truck cost $10,000, has a 5-year life, and a $2,000 residual value. Given a December 31 year-end, and use of the double-declining balance method, how much is 20X9 depreciation expense?
Which of the following equations would best represent a formula for calculating units-of-output depreciation for a period?
A. Cost divided by total expected output.
The USA tax code provides special tax provisions related to “deprecation.” Which of these is not a valid statement?
A. GAAP depreciation is generally at a faster rate than tax.
Diamond Industries acquired a new machine at a cost of $62,000. Service life was estimated to be eight years and total units of output to be 200,000. Estimated residual value was $8,000. Compute depreciation for the second year in the life of the machine using the straight-line method.
Costs related to property, plant, and equipment which are incurred subsequent to acquisition should be added to an asset’s depreciable base if the:
A. the service life of an asset is prolonged.
A major overhaul was completed on a truck that resulted in an extension in its useful life from three to five years. The proper entry to reflect this transaction includes a:
A. debit to Accumulated Deprecation.
A machine that cost $9,000 with a book value of $2,000 is sold for $1,100, and an entry is made. Which of the following is true about the entry?
A. Accumulated Depreciation is debited for $2,000.
In an exchange transaction, the term boot means:
A. The transaction was at a loss.
When should an implied loss be recognized on the exchange of assets?
A. When the exchange has commercial substance.
Which of the following terms best relates to intangible assets?
The inclusion of goodwill in the financial statements of a company indicates:
A. that the company has a favorable reputation with its customers.
On January 1, 20X1, Burrus Company purchased for $76,000, equipment having a service life of ten years and an estimated residual value of $4,000. Burrus has recorded monthly depreciation of the equipment on the straight-line method. On December 31, 20X9, the equipment was sold for $15,000. What is the amount of gain to be recognized as a result of this sale?
Current liabilities are obligations that will be paid:
A. with cash.
On July 1, A company borrows $100,000 on a 5% note, due in one year. What adjusting entry is needed on December 31?
A. No entry is needed.
The account Discount on Notes Payable:
A. is a contingent liability account.
Contingent liabilities should be recorded in the accounts when:
A. it is probable that the future event will occur.
A balance in the Warranty Liability account:
A. indicates that the books have not yet been closed.
Federal income taxes should not be withheld from:
A. amounts paid to independent contractors.
Leonard recorded gross pay of $250,000. This is subject to employee’s portion of social security and Medicare taxes of $16,750, unemployment taxes of $3,000, and federal tax withholdings of $46,000. How much is payroll tax expense?
On July 1, 20X7, Vasquez Publishing Company sold 1,000 two-year subscriptions to a monthly magazine. The subscriptions sold for $18 each. The first issue was mailed at the end of July. What is the proper balance sheet disclosure regarding this transaction for Vasquez at December 31, 20X7?
Which of the following is not a feature of the corporate form of organization?
A. Limited liability.
Stringer Corporation issued 5,000 shares of $2 par value common stock. The issue price was $7.50 per share. The entry to record this transaction includes a:
A. debit to Cash for $10,000.
Normally, the payment of a previously declared dividend will result in:
A. a decrease in liabilities.
Dividends in arrears:
A. pertain to cumulative preferred stock.
Which of the following statements about treasury stock is true?
A. Excess of the sales price over cost should be credited to retained earnings.
Reissuing treasury stock at more than its cost will trigger a credit to:
Which of the following transactions would cause a change in total stockholders’ equity?
A. A stock dividend.
The statement of stockholders’ equity includes information about:
A. Beginning equity account balances.
In its initial capital stock transaction, the Board of Directors of Manning Corporation approved the issuance of 5,000 shares of $5 par value common stock, which were sold on the same day for $60 per share. The board was authorized to issue 10,000 shares of this class of stock. What is the balance in the Common Stock account after recording this stock issuance?