Accounting

1. The Modified Accelerated Cost Recovery System (MACRS) specifies which of the following depreciation methods for buildings? 

A. 150% declining-balance.

B. Double-declining-balance.

C. Straight line.

D. Buildings are not depreciable assets.

2. The Modified Accelerated Cost Recovery System (MACRS) specifies which of the following depreciation methods for land? 

A. 150% declining-balance.

B. Double-declining-balance.

C. Straight line.

D. Land is not a depreciable asset.

3. If an organization has an obligation to pay $5,000 to a supplier two years from now, the present value of the obligation: 

A. is less than $5,000.

B. is $5,000.

C. is more than $5,000.

D. could be calculated using an annuity factor from the present value tables.

4. Depreciation, in accounting, is a process that results in: 

A. depreciable assets being reported in the balance sheet at their fair market value.

B. accumulating cash for the replacement of the asset.

C. an accurate measurement of the economic usefulness of an asset.

D. spreading the cost of an asset over its useful life to the entity.

5. Leasehold is an example of which of the following types of assets? 

A. Current asset.

B. Property, plant and equipment.

C. Goodwill.

D. Intangible asset.

6. The principal challenge to calculating depletion is estimating: 

A. the cost of the asset.

B. the salvage value of the exploration equipment.

C. the demand for the product.

D. the quantity of material to be recovered.

7. Long-lived, intangible assets such as leasehold improvements, patents, and copyrights are all subject to: 

A. depreciation

B. amortization

C. depletion

D. consolidation

8. When a depreciable asset is sold: 

A. a gain arises if the sales proceeds exceed the net book value.

B. a loss arises if the sales proceeds exceed the net book value.

C. any cash received results in a gain.

D. depreciation expense is adjusted so there is no gain or loss.

9. Goodwill is an...