21) Repairs made to equipment as part of a yearly maintenance project would be recorded in the journal by:
A) debiting Equipment
B) debiting Repair Expense
C) debiting Depreciation Expense
D) debiting Accumulated Depreciation
22) Treating a capital expenditure as an immediate expense:
A) understates expenses and overstates owners' equity
B) understates expenses and understates assets
C) overstates assets and overstates owner's equity
D) overstates expenses and understates net income
23) The cost of land would include all of the following
except:
A) survey and legal fees incurred
B) costs of removing any unwanted building on the land
C) paving and fencing
D) costs to grade and clear the land
24) The process of allocating a capital asset's cost to expense over the period the asset is used is called:
A) accumulation
B) depreciation
C) interest
D) repairs expense
25) Which of the following depreciation methods best fits those assets that tend to wear out before they become obsolete?
A) depletion method
B) straight-line method
C) double-declining-balance method
D) units-of-production method
26) Which accounting principle directs the depreciation process?
A) historical cost
B) going concern
C) full disclosure
D) matching
27) Which of the following statements is true?
A) Depreciation is a process of objective valuation.
B) Depreciation means that a business sets aside cash to replace assets as they become fully amortized.
C) Accumulated depreciation represents a growing amount of cash to be used to replace the existing asset.
D) Accumulated depreciation is that portion of a capital asset's cost that has already been recorded as an expense.
28) Which of the following depreciation methods best applies to those assets that generate greater revenue earlier in their useful lives?
A) depletion method
B) double-declining-balance method
C) units-of-production method
D) straight-line method
29) To measure depreciation for a tangible long-lived asset, all of the following must be known
except:
A) estimated useful life
B) current market value
C) estimated residual value
D) historical cost
30) One of several terms can be used to identify the expected cash value of a tangible long-lived asset at the end of its useful life. Which term below is
not
used in this sense?
A) residual value
B) scrap value
C) current carrying amount
D) salvage value