91. On January 1, 2014, Chicago Furniture purchases a new delivery truck. The company pays $60,000 for the truck, sales taxes of $3,400, and delivery costs of $1,700. Chicago Furniture pays a local vendor $3,600 to paint the company's name and logo on the side of the truck. The company also pays $12,000 for an annual insurance policy and $1,300 for a motor vehicle license. At what amount will Chicago Furniture record the truck on its statement of financial position at January1, 2014?
a.$60,000
b.$65,300
c.$68,700
d.$82,000
92. Which of the following statement regarding depreciation is
false?
a.The concept of depreciation is inconsistent with the going concern assumption.
b.Recognizing depreciation on an asset does not result in an accumulation of cash for replacement of the asset.
c.The three factors affecting the computation of depreciation include cost, useful life, and residual value.
d.Accumulated depreciation is reported on the statement of financial position as a deduction from plant assets.
93. Depreciation
a.Is a process of asset valuation during the period of ownership by a company.
b.Applies to land, land improvements, buildings, and equipment.
c.Is accumulated and reported as a contra-asset on the statement of financial position.
d.Is recognized as a way to accumulated cash for the eventual replacement of assets.
94. The balance in the Accumulated Depreciation account represents the
a.cash fund to be used to replace plant assets.
b.amount to be deducted from the cost of the plant asset to arrive at its fair value.
c.amount charged to expense in the current period.
d.amount charged to expense since the acquisition of the plant asset.
95. Which one of the following items is
not
a consideration when recording periodic depreciation expense on plant assets?
a.Residual value
b.Estimated useful life
c.Cash needed to replace the plant asset
d.Cost
96. Depreciation is the process of allocating the cost of a plant asset over its useful life in
a.an equal and equitable manner.
b.an accelerated and accurate manner.
c.a systematic and rational manner.
d.a conservative market-based manner.
97. The book value of an asset is equal to the
a.asset's fair value less its historical cost.
b.blue book value relied on by secondary markets.
c.replacement cost of the asset.
d.asset's cost less accumulated depreciation.
98. Accountants do not attempt to measure the change in a plant asset's fair value during ownership because
a.the assets are not held for resale.
b.plant assets cannot be sold.
c.losses would have to be recognized.
d.it is management's responsibility to determine fair values.
99. Depreciation is a process of
a.asset devaluation.
b.cost accumulation.
c.cost allocation.
d.asset valuation.
100.Recording depreciation each period is necessary in accordance with the
a.going concern principle.
b.cost principle.
c.expense recognition principle.
d.asset valuation principle.