Accounting Skills Test (Assets and Revenue)
A fast food restaurant chain sells a division that operates movie theaters. What type of activity is this?
A Florida hotel chain's properties located on the Emerald Coast are destroyed when the area is devastated by an earthquake. What type of activity is this?
A manufacturing firm sells a parcel of land next to one of its warehouses. What type of activity is this?
A professional soccer team pays a signing bonus to one of its new players. What type of activity is this?
An asset impairment occurs when the then-current book value of an asset exceeds ____________.
Assets that can provide future benefits without having physical form are called ___________.
Depreciation is not a decline in value, but a process of __________________.
Early in Year 1, XYZ Company begins construction of an office building. The contract price for the construction is $23,400,000. The project, which is completed in Year 3, incurs costs as follows: ...
How are property, plant, and equipment and related accumulated depreciation generally disclosed in the Balance Sheet?
If a reasonable estimate of the amount of cash to be received can be made, when should revenue be recognized?
In 2008, XYZ Company spends $250,000 on research and development to generate new product lines. Of the five projects in progress, one results in a patented item while the other four are considered ...
In financial statements, what is the proper handling of the Allowance for Uncollectible Accounts?
In the indirect method, which of the following is included in the cash flow from investing activities?
In which of the following depreciation methods is the estimate of useful life NOT required?
In which of the following methods may salvage be ignored when calculating depreciation?
Late in Year 1, XYZ Company signs a contract to construct a bridge for the Florida Dept. of Transportation. The contract price is $42,000,000. The costs during the 3-year construction period are as...
Natural resources are referred to as __________________.
On its December 31 Balance Sheet in Year 1, XYZ Company reports Accounts Receivable of $60,000 and an Allowance for Uncollectible Accounts of $6,000. During Year 2, credit sales total $1,800,000, c...
On January 1, 2007, XYZ Company has machinery on the books that originally cost $200,000. In 2007, the following expenditures were made: Minor Repairs: $5,000 IMproveMents: $10,000 Additions: $37,...
Small adjustments to and replacement of plant assets that have little or no effect on useful life are called _______________.
The amortization of natural resources is referred to as __________________.
The denominator of the sum-of-the-years digits fraction is ______________.
The legal right to future benefits of an invention is referred to as a/an _______________.
The matching of costs with the benefits derived from the use of an asset is ____________.
The proceeds gained upon disposition of an asset at the end of its useful life are referred to as the asset's _______________.
The situation in which a company uses its accounts receivable to obtain a loan is called ___________. In this process, the company usually maintains control of the receivables, collects from custom...
The sum-of-the-years digits method is an example of a/an ________________.
The term _______________ refers to "cost less accumulated" depreciation.
What is the proper accounting for all research and development costs when incurred?
What occurs when the then-current book value of an asset exceeds the sum of expected undiscounted cash flow?
When a company uses its accounts receivable as collateral for a loan, the transaction is known as a/an _____________________.
When all else is equal, analysts ____________________.
When an asset impairment occurs, a company writes down the asset to _______________.
When managers choose estimates that lead to higher current income, analysts refer to those earnings as ________________.
When the ______________ method is used to estimate uncollectible accounts, the balance in the Allowance for Uncollectible Accounts is adjusted to reflect the desired ending balance.
When the ______________ method is used to estimate uncollectible accounts, the provision for uncollectible accounts is added to the existing balance in the Allowance for Uncollectible Accounts.
When using the indirect method to determine operating cash flows in a cash flow statement, which of the following would be added to net income?
When using the indirect method to determine operating cash flows in a cash flow statement, which of the following would be deducted from net income?
Which of the accounts below would NOT be treated as a reduction in sales revenue on the income statement?
Which of the following accounts is credited for depreciation?
Which of the following accounts is debited if depreciation is a production cost?
Which of the following basic patterns would be appropriate for allocation of intangibles?
Which of the following basic patterns would be appropriate for allocation of land?
Which of the following costs is capitalized for a self-constructed asset?
Which of the following costs is normally expensed when incurred, even though it has future benefits?
Which of the following costs would NOT be included in the cost of machinery?
Which of the following depreciation methods would best match the cost with expected benefits when the rate of usage for an asset varies greatly from period to period?
Which of the following events reduces total assets?
Which of the following factors is an example of a functional cause of depreciation?
Which of the following groups assets into one of seven classes for tax depreciation?
Which of the following is a characteristic of grouping assets into one of seven life classes?
Which of the following is a functional factor in determining depreciation?
Which of the following is a type of intangible asset that appears on the balance sheet only when one company is acquired by another?
Which of the following is NOT an accepted method for financial reporting for wasting assets?
Which of the following is the generally accepted procedure of corrective action for material misestimates involving depreciation?
Which of the following is the same as an outright sale?
Which of the following life spans would be used for automobiles if the MACRS method of depreciation is employed?
Which of the following methods allows all operating expenses, related with oil and gas exploration, to be capitalized irrespective of whether the exploration is successful or not?
Which of the following statements about MACRS depreciation is NOT true?
Which of the following statements about selecting the best depreciation method for tax purposes is incorrect?
Which term below is used when referring to the write-off of intangible assets?
XYZ Company acquires a machine for $20,000 in 2000 and depreciates it on the straight line basis, no salvage value, for two years based on an estimated ten-year life. In 2002 it was determined that...
XYZ Company buys a building on April 1, 2008 for $100,000. The building has a physical life of 50 years, but XYZ Company anticipates using the building for 50 years. At the end of 50 years, the bui...
XYZ Company generates five new products in 2008. The interest capitalized for these items is referred to as __________________.
XYZ Company had sales of $585,000 during Year 1, $260,000 of which were on account. The account balances in Accounts Receivable and in Allowance for Uncollectible Accounts on December 31 of Year 1 ...
XYZ Company has credit sales of $4,000,000 during Year 1. At December 31 Year 1, the balance in Accounts Receivable is $142,000. The company estimates bad debts to equal 1 percent of credit sales. ...
XYZ Company owns machinery with a cost of $100,000 and an accumulated depreciation of $60,000 on January 1, 2007. On July 1, 2007, the machinery is sold for $43,000. The straight line depreciation ...
XYZ Company purchases a machine with a cost of $20,000, a salvage value of $2,000, and life of five years. If the company uses the sum-of-the-years digits method, what would the depreciation charge...
XYZ Company purchases a piece of equipment on January 1, 2007 at a cost of $100,000. The equipment has a five-year useful life and can be sold for $10,000 at the end of five years. If XYZ Company u...
XYZ Company reports Accounts Receivable of $60,000 and an Allowance for Uncollectible Accounts of $6,000 on its December 31 Year 1 Balance Sheet. During Year 2, credit sales total $1,800,000, colle...
XYZ Company reports its net assets at a book value of $150,000. Investigation reveals that the net assets had a market value of $175,000. In addition, XYZ Company had been offered $220,000 for the ...
XYZ Company sells a residential lot to Mr. A for $140,000. The cost assigned to the lot by XYZ Company is $56,000. The contract calls for five annual payments of $28,000. Each payment is received o...