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Intermediate Accounting Chapter 10 Test Bank Questions
with Detailed Verified Answers (100% Correct Answers)
/Already Graded A+
Plant assets may properly include
a. deposits on machinery not yet received.
b. idle equipment awaiting sale.
c. land held for possible use as a future plant site.
d. none of these.
Ans: d. Long-lived tangible assets used in the enterprise's operations
Which of the following is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for resale
c. Acquired for use
d. Yields services over a number of years
Ans: b
Which of these is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for use in operations
c. Yields services over a number of years
d. All of these are major characteristics of a plant asset.
Ans: d
Cotton Hotel Corporation recently purchased Emporia Hotel and the land on
which it is located with the plan to tear down the Emporia Hotel and build a
new luxury hotel on the site. The cost of the Emporia Hotel should be
a. depreciated over the period from acquisition to the date the hotel is
scheduled to be torn down.
b. written off as an extraordinary loss in the year the hotel is torn down.
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vPretest - Stuvia US
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c. capitalized as part of the cost of the land.
d. capitalized as part of the cost of the new hotel.
Ans: c
The cost of land does not include
a. costs of grading, filling, draining, and clearing.
b. costs of removing old buildings.
c. costs of improvements with limited lives.
d. special assessments.
Ans: c
The cost of land typically includes the purchase price and all of the following
costs except
a. grading, filling, draining, and clearing costs.
b. street lights, sewers, and drainage systems cost.
c. private driveways and parking lots.
d. assumption of any liens or mortgages on the property.
Ans: c
If a corporation purchases a lot and building and subsequently tears down the
building and uses the property as a parking lot, the proper accounting
treatment of the cost of the building would depend on
a. the significance of the cost allocated to the building in relation to the
combined cost of the lot and building.
b. the length of time for which the building was held prior to its demolition.
c. the contemplated future use of the parking lot.
d. the intention of management for the property when the building was
acquired.
Ans: d
Approved By:
vPretest - Stuvia US
Intermediate Accounting Chapter 10 Test Bank Questions
with Detailed Verified Answers (100% Correct Answers)
/Already Graded A+
Plant assets may properly include
a. deposits on machinery not yet received.
b. idle equipment awaiting sale.
c. land held for possible use as a future plant site.
d. none of these.
Ans: d. Long-lived tangible assets used in the enterprise's operations
Which of the following is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for resale
c. Acquired for use
d. Yields services over a number of years
Ans: b
Which of these is not a major characteristic of a plant asset?
a. Possesses physical substance
b. Acquired for use in operations
c. Yields services over a number of years
d. All of these are major characteristics of a plant asset.
Ans: d
Cotton Hotel Corporation recently purchased Emporia Hotel and the land on
which it is located with the plan to tear down the Emporia Hotel and build a
new luxury hotel on the site. The cost of the Emporia Hotel should be
a. depreciated over the period from acquisition to the date the hotel is
scheduled to be torn down.
b. written off as an extraordinary loss in the year the hotel is torn down.
Approved By:
vPretest - Stuvia US
, 2
c. capitalized as part of the cost of the land.
d. capitalized as part of the cost of the new hotel.
Ans: c
The cost of land does not include
a. costs of grading, filling, draining, and clearing.
b. costs of removing old buildings.
c. costs of improvements with limited lives.
d. special assessments.
Ans: c
The cost of land typically includes the purchase price and all of the following
costs except
a. grading, filling, draining, and clearing costs.
b. street lights, sewers, and drainage systems cost.
c. private driveways and parking lots.
d. assumption of any liens or mortgages on the property.
Ans: c
If a corporation purchases a lot and building and subsequently tears down the
building and uses the property as a parking lot, the proper accounting
treatment of the cost of the building would depend on
a. the significance of the cost allocated to the building in relation to the
combined cost of the lot and building.
b. the length of time for which the building was held prior to its demolition.
c. the contemplated future use of the parking lot.
d. the intention of management for the property when the building was
acquired.
Ans: d
Approved By:
vPretest - Stuvia US
