Chapter 8 Questions

Question 1

Plant assets are:

Answer 1

tangible assets used in a company’s operations that have a useful life of more than one accounting period.

Question 2

The acquisition cost of a plant asset does not include

Answer 2

repair costs resulting from damage to the plant asset while it was being unpacked

Question 3

The useful life of a new plant asset _____.

Answer 3

might be estimated based on the experience of others or on engineering studies and judgment if the company does not have past experience with a similar asset.

Question 4

The double-declining-balance and straight-line depreciation methods:

Answer 4

produce the same amount of total depreciation over an asset’s useful life. Correct

Question 5

Exclusive right granted to its owner to manufacture and sell an item.

Answer 5

Patent

Question 6

Gives its owner the exclusive right to publish and sell musical, literary, or artistic work over a defined period of time

Answer 6

Copyright

Question 7

The amount by which a company’s value exceeds the value of its individual assets and liabilities.

Answer 7

Goodwill