©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Financial Accounting Exam #3 Questions
With Correct Answers
A long-term asset is recorded at the: - answer✔Cost of the asset plus all costs necessary to the
asset ready for use.
The Open Grill incurred the following costs in acquiring a new piece of land: What is the total
recorded cost of the land? - answer✔$100,800.
The Cheese Factory incurred the following costs related to acquiring a new piece of equipment:
What is the total recorded cost of the equipment? - answer✔$59,000.
Which of the following expenditures should be recorded as an asset? - answer✔Interest costs
during the construction period of a new building.
A company purchased land and building from a seller for $900,000. A separate appraisal reveals
the fair value of the land to be $200,000 and the fair value of the building to be $800,000. For
what amount would the company record land at the time of purchase? - answer✔$180,000
Tasty Inn and Out incurred the following costs related to its purchase of equipment. What is the
recorded cost of the equipment? - answer✔$11,900
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
An exclusive 20-year right to manufacture a product or to use a process is a: - answer✔Patent.
Which of the following is properly recorded as an intangible asset? - answer✔A purchased
patent
Which of the following is not recorded as an intangible asset in the balance sheet? -
answer✔Research and development.
Which of the following expenditures should be recorded as an expense? - answer✔Ordinary
repairs and maintenance.
Which of the following expenditures should be recorded as an asset? - answer✔An addition
which increases future benefit
Which of the following expenditures should be capitalized? - answer✔An improvement to a
tangible asset.
Which of the following depreciation methods typically results in the highest depreciation
expense during the first year of an asset's life? - answer✔Double declining balance method.
Which of the following correctly describes the nature of depreciation? - answer✔Depreciation
represents the allocation of the cost of property, plant, and equipment over its service life.
Accumulated depreciation is: - answer✔A contra-asset.
12/3/2024 11:27AM
Financial Accounting Exam #3 Questions
With Correct Answers
A long-term asset is recorded at the: - answer✔Cost of the asset plus all costs necessary to the
asset ready for use.
The Open Grill incurred the following costs in acquiring a new piece of land: What is the total
recorded cost of the land? - answer✔$100,800.
The Cheese Factory incurred the following costs related to acquiring a new piece of equipment:
What is the total recorded cost of the equipment? - answer✔$59,000.
Which of the following expenditures should be recorded as an asset? - answer✔Interest costs
during the construction period of a new building.
A company purchased land and building from a seller for $900,000. A separate appraisal reveals
the fair value of the land to be $200,000 and the fair value of the building to be $800,000. For
what amount would the company record land at the time of purchase? - answer✔$180,000
Tasty Inn and Out incurred the following costs related to its purchase of equipment. What is the
recorded cost of the equipment? - answer✔$11,900
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
An exclusive 20-year right to manufacture a product or to use a process is a: - answer✔Patent.
Which of the following is properly recorded as an intangible asset? - answer✔A purchased
patent
Which of the following is not recorded as an intangible asset in the balance sheet? -
answer✔Research and development.
Which of the following expenditures should be recorded as an expense? - answer✔Ordinary
repairs and maintenance.
Which of the following expenditures should be recorded as an asset? - answer✔An addition
which increases future benefit
Which of the following expenditures should be capitalized? - answer✔An improvement to a
tangible asset.
Which of the following depreciation methods typically results in the highest depreciation
expense during the first year of an asset's life? - answer✔Double declining balance method.
Which of the following correctly describes the nature of depreciation? - answer✔Depreciation
represents the allocation of the cost of property, plant, and equipment over its service life.
Accumulated depreciation is: - answer✔A contra-asset.
