ACC 291 CHAPTER 9 EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026

ACC 291 CHAPTER 9 EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026 If a plant asset is retired before it is fully depreciated and no salvage value is received, a ______ on disposal occurs. - Answers loss Where is the loss on disposal of a plant asset reported in the financial statements? A : as a direct decrease to the capital account on the balance sheet B : as a direct increase to the capital account on the balance sheet C : in the Other Expenses and Losses section of the income statement D : in the Other Revenues and Gains section of the income statement - Answers C To find the asset turnover ratio, divide A : net income by average total assets B : net income by ending total assets C : net sales by average total assets D : net sales by ending total assets - Answers C The cost of intangible assets with ___________ should not be amortized. - Answers indefinite lives Companies can amortize a patent for a period that cannot exceed A : 20 years B : 50 years C : 10 years D : 40 years - Answers A A patent that has a legal life of 20 years and a useful life of less than 20 years should A : be amortized over its useful life B : be amortized over 20 years regardless of its useful life C : be expensed in the year of acquisition D : not be amortized - Answers A Companies usually show intangible assets separately under "Intangible assets." A : True B : False - Answers TRUE Which of the following should be disclosed in the balance sheet or the notes to the financial statements? A : balances of the major classes of assets B : amount of depreciation and amortization expense for the period C : depreciation and amortization methods used D : all of the choices are correct - Answers D In selecting a depreciation method, a company should choose the method that A : best measures the plant asset's contribution to revenue over its useful life B : best measures the plant asset's market value over its useful life C : has been used most often in the past by the company D : is easiest to apply - Answers A Which of the following expenditures is intended to add to the utility of plant assets for more than one accounting period? A : current expenditures B : revenue expenditures C : committed expenditures D : capital expenditures - Answers D Capital expenditures are expenditures that increase the company's investment in A plant assets B purchased goods C bonds D stocks - Answers A A change in the estimated salvage value of a plant asset requires a restatement of both current and future years' depreciation. A True B False - Answers A Which ratio is calculated as net sales divided by average total assets? A average sales B beginning total assets C net income D asset turnover - Answers D An operating lease allows the lessee to account for the transaction as a rental. A True B False - Answers A All of the following are classified under property, plant and equipment except A land improvement, such as parking lots and fences B a truck held for resale by an automobile dealership C a building used as a factory D land used in ordinary business operations - Answers B If the invoice price is $30,000 and freight charges are $5,000, then the total cost of equipment is $35,000. A True B False - Answers A On December 1, 2013, Acme Company places a new asset into service. The cost of the asset is $50,000 with an estimated 5-year life and $10,000 salvage value at the end of its useful life. What is the depreciation expense for 2014 if Acme Company uses the straight-line method of depreciation? A $8,000 B $1,333 C $4,500 D $2,000 - Answers A If the estimate of the useful life of equipment changes, the amount of periodic depreciation _________ be changed in the current year and in future years. - Answers should A plant asset is used in the operations of the business. A True B False - Answers A The change in a plant asset's market value ______________ be measured during ownership. - Answers SHOULD NOT The cost of a long-term asset is expensed as the asset benefits the company. A : True B : False - Answers A Gains on disposal occur when proceeds from the ________ of a plant asset exceeds its book value. A sale B depreciation C exchange D amortization - Answers A Gains on disposal occur when the proceeds from the sale of a plant asset are greater than the A market value B current value C depreciated value D book value - Answers D ________ to a plant asset that increase its operating efficiency, productive capacity, or expected useful life are generally debited to the asset affected. A Ordinary repairs B Indirect expenses C Regular maintenance D Additions and improvements - Answers D A depreciable cost is the cost of an asset A less its face value B less its book value C minus accumulated depreciation D less its salvage value - Answers D