GFS part 7

Asset costs must be capitalized when 3 criteria are met. One of them is:

• Cost is $15,000 USD or more on a per unit basis
• Estimated useful life is two years or more
• Estimated useful life is 5 years or more

An Authorization for Expenditure (AFE) is required for anyone at 3M that plans make an investment in:

• Equipment procured for sale
• Equipment procured for purchase
• Equipment procured for disposal

PP&E spare parts must meet the criteria to be capitalized. One of them is:

• The value of the part is greater than $50,000 USD
• There is a short lead time to obtain the part
• The value of the part is greater than $5,000 USD

When the internal engineering costs can be capitalized?

• When the acquisition of the asset is unlikely to happen
• Engineering project time reporting must be in place
• Both answers are correct

Which of stage is not related to engineering costs relating to fixed assets?

• Preliminary
• Pre-acquisition
• Elimination

The burden rate is a fixed average rate for the year which is calculated by:

• Product code
• Cost center
• Both answers are correct

The example of purpose of Free Goods is:

• Satisfy customer obligations
• Internal use by 3M of office supplies
• Deal promotions

Free good provided to customer (not including cash), the cost of it should be classified as:

• Expense
• Reduction in revenue
• Both answers are incorrect

What does the term US FCPA stand for?

• US Foreign Corrupt Practices Act
• US Federal Corrupt Practices Act
• US Federal Corrupt Policy Agreement

How often is the annual goodwill impairment test performed at 3M?

• Once a year and additionally when interim triggering events arise
• Twice a year
• Quarterly