TRUE/FALSE
1.Expenditures made that extend the life of existing plant assets are recorded as
capital
expenditures.
2.Buildings and land purchased by a company would be included in property, plant, and equipment on the company’s books.
3.The book value of plant assets is calculated as the cost of the assets plus accumulated depreciation.
4.Accelerated depreciation allocates a larger portion of the cost of a plant asset to expense in the earlier years of the asset’s life than in the later years.
5.Firms must use the same depreciation method for tax as they do for financial reporting purposes.
6.The systematic allocation of the cost of natural resources to the periods that benefit from their use is known as amortization.
7.The excess of the purchase price of a company’s assets over the book value of the assets is known as goodwill.
8.Intangible assets would include patents, copyrights, trademarks, and goodwill.
9.Cash received from the sale of long-term assets is considered an operating activity.
10.Plant assets are reported on the balance sheet at their fair market value.