Multiple Choice Question 96 

A company purchased office equipment for $40,000 and estimated a salvage value of $8,000 at the end of its 4-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is

50%.  

5%. 

20%. 

25%.

Multiple Choice Question 72 

A company purchases a remote site building for computer operations. The building will be suitable for operations after some expenditures. The wiring must be replaced to computer specifications. The roof is leaky and must be replaced. All rooms must be repainted and recarpeted and there will also be some plumbing work done. Which of the following statements is true?

The cost of the building is the purchase price of the building, while the additional expenditures are all capitalized as Building Improvements. 

The cost of the building will include the cost of replacing the roof. 

The cost of the building will not include the repainting and recarpeting costs. 

The wiring is part of the computer costs, not the building cost.

Multiple Choice Question 202 

In recording the acquisition cost of an entire business,

goodwill is recorded as the excess of cost over the fair value of identifiable net assets. 

assets are recorded at the seller’s book values. 

goodwill is recorded as the excess of cost over the book value of identifiable net assets. 

goodwill, if it exists, is never recorded.

Multiple Choice Question 226 

Ordinary repairs are expenditures to maintain the operating efficiency of a plant asset and are referred to as

capital expenditures. 

expense expenditures. 

improvements. 

revenue expenditures.

Multiple Choice Question 64 

The four subdivisions for plant assets are

property, plant, equipment, and land. 

intangibles, land, buildings, and equipment. 

land, land improvements, buildings, and equipment. 

furnishings and fixtures, land, buildings, and equipment.

Multiple Choice Question 182 

A coal company invests $12 million in a mine estimated to have 20 million tons of coal and no salvage value. It is expected that the mine will be in operation for 5 years. In the first year, 1,000,000 tons of coal are extracted and sold. What is the depletion expense for the first year?

$60,000 

$600,000  

$240,000 

Cannot be determined from the information provided

Multiple Choice Question 70 

A note payable is in the form of

a contingency that is reasonably likely to occur. 

a standing agreement. 

a written promissory note. 

an oral agreement.

Multiple Choice Question 240 

Companies report current liabilities on the balance sheet in

order of magnitude. 

random order. 

alphabetical order. 

order of maturity.

Multiple Choice Question 88 

The interest charged on a $75,000 note payable, at the rate of 8%, on a 3-month note would be

$6,000. 

$3,000. 

$1,500.      

$1,000.

Multiple Choice Question 197 

In a recent year Cold Corporation had net income of $250,000, interest expense of $50,000, and a times interest earned ratio of 9. What was Cold Corporation’s income before taxes for the year?

$500,000 

$450,000    

$400,000 

None of these

Multiple Choice Question 100 

Ed’s Bookstore has collected $750 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Ed’s Bookstore make to show the April remittance?

No entry required. 

Sales Tax Expense750

           Cash750

 Sales Tax Expense750

           Sales Taxes Payable750

Sales Taxes Payable750

           Cash750

Multiple Choice Question 99 

A cash register tape shows cash sales of $1,500 and sales taxes of $120. The journal entry to record this information is 

Cash1,620

           Sales Taxes Payable120

           Sales Revenue1,500

Cash1,620

           Sales Revenue1,500

           Sales Taxes Revenue120

Cash1,500

Sales Tax Expense120

           Sales Revenue1,620

Cash1,620

           Sales Revenue1,620

Multiple Choice Question 166 

Bond interest paid is

higher when bonds sell at a discount. 

higher when bonds sell at a discount and lower when bonds sell at a premium. 

lower when bonds sell at a premium. 

the same whether bonds sell at a discount or a premium.

Multiple Choice Question 180 

A $600,000 bond was retired at 98 when the carrying value of the bond was $592,000. The entry to record the retirement would include a

gain on bond redemption of $4,000. 

loss on bond redemption of $8,000. 

gain on bond redemption of $8,000. 

loss on bond redemption of $4,000.