Advanced Accounting Chapter 19

If a plant asset costs $3,000.00, has accumulated depreciation of $2,200.00 and is sold for $800.00 the gain or loss on disposal is

• an $800.00 gain

• an $800.00 loss

• a $2,200 loss

• no gain or loss

The more efficient the investment, the

• lower the return on investment (ROI)

• higher the return on investment (ROI)

• higher the current ratio

• lower the current ratio

If an intangible asset's useful life is different from its legal life, amortization should be based on

• only the legal life

• only the useful life

• the legal or useful life, whichever is greater

• the legal or useful life, whichever is less

GAAP requires that the cost of a plant asset be

• totally expensed in the first year of the plant asset's life

• expensed over ten years

• expensed over the plant asset's useful life

• expensed over the plant asset's legal life

Generally, a business removes a plant asset from use and disposes of it

• when a profit can be made on the disposal

• when the asset is no longer usable

• when the asset is three years old

• at the end of the fiscal year

Some examples of plant assets are

• prepaid insurance, computers and equipment

• supplies, furniture, and cash

• delivery equipment, supplies and computers

• none of these

The book value of a plant asset is its original cost

• minuts accumulated depreciation

• plus accumulated depreciation

• plus salvage value

• minus salvage value

If a plant asset costs $6,000, has accumulated depreciation of $5,000 and is sold for $1,200, the fain or loss on disposal is a

• $1,200 gain

• $5,000 loss

• $200 gain

• $200 loss

The amount by which a plant asset depreciates is classified as a(n)

• asset

• liability

• revenue

• expense

The value of an asset determined by tax authorities for th purpose of calculating taxes.

• accelerated depreciation

• amortization

• assessed value

• declining-balance method of depreciation

• double declining balance method of depreciation