Chapter 7 Textbook

Question 1

Which of the following are long-term tangible assets?

Copyright
Equipment
Trademark
Property
Accounts receivable

Answer 1

Equipment
Property

Question 2

The initial cost of property, plant, and equipment includes the purchase price and all expenditures necessary to bring the asset to its desired condition and location for use.

T/F

Answer 2

True

Reason: All costs should be capitalized to bring the asset to its intended and useful state.

Question 3

An asset that has no physical substance is called a(n) __________
asset.

Answer 3

intangible

Question 4

The future benefits attributable to a building are typically ______ certain than the future benefits attributable to a patent.

Answer 4

more

Question 5

The types of expenditures that can occur subsequent to an asset’s acquisition are

Select all that apply

improvements.
goodwill.
additions.
repairs and maintenance.

Answer 5

improvements.
additions.
repairs and maintenance.

Question 6

The purchase price and all costs to bring an asset to its desired condition and location for use should be _____.

Answer 6

capitalized

Question 7

The future benefits attributable to intangible assets are usually Blank______ certain than the future benefits attributable to tangible assets.

Multiple choice question.

less
more

Answer 7

less

Question 8

The allocation of the cost of a tangible asset over its service life is referred to as
________________.

Answer 8

depreciation

Question 9

Select all that apply

Which of the following are expenditures for assets subsequent to acquisition?

Multiple select question.

Freight charges
Improvements
Repairs and maintenance
Additions

Answer 9

Improvements
Repairs and maintenance
Additions

Question 10

Select all that apply

Which of the following are long-term tangible assets?

Multiple select question.

Trademark
Accounts receivable
Property
Copyright
Equipment

Answer 10

Property
Equipment