Acc 206 Week 2 Quiz – Strayer New

ACC 206 Week 2 Quiz – Strayer NEW

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CHAPTER 10

PLANTASSETS, NATURAL RESOURCES, AND INTANGIBLE ASSETS

CHAPTERSTUDY OBJECTIVES

1. Describe how the cost principle applies to plant assets.

2. Explain the concept of depreciation..

3. Compute periodic depreciation using different methods.

4. Describe the procedure for revising periodic depreciation.

5. Distinguish between revenue and capital expenditures, and explain the entries for each.

6. Explain how to account for the disposal of a plant asset.

7. Compute periodic depletion of natural resources.

8. Explain the basic issues related to accounting for intangible assets.

9. Indicate how plant assets, natural resources, and intangible assets are reported.

10. Explain how to account for the exchange of plant assets.

TRUE-FALSESTATEMENTS

1. All plant assets (fixed assets) must be depreciated for accounting purposes.

2. When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

3. When purchasing delivery equipment, sales taxes and motor vehicle licenses should be charged to Delivery Equipment.

4. Land improvementsare generally charged to the Land account.

5. Once cost is established for a plant asset, it becomes the basis of accounting for the asset unless the asset appreciates in value, in which case, market value becomes the basis for accountability.

6. The book value of a plant asset is always equal to its fair market value.

7. Recording depreciation on plant assets affects the balance sheet and the income statement.

8. The depreciable cost of a plant asset is its original cost minus obsolescence.

9. Recording depreciationeach period is an application of the matching principle.

10. The Accumulated Depreciation account...