TEST BANK FOR Operating Assets: Property, Plant and Equipment, and Intangibles CHAPTER 8 LATEST UPDATED VERSION 2026,WITH A CORRECT ANSWERS.

TEST BANK FOR Operating Assets: Property, Plant and Equipment,
and Intangibles CHAPTER 8 LATEST UPDATED VERSION
2026,WITH A CORRECT ANSWERS.
True / False

1. The Property, Plant, and Equipment category includes long-term investments.
a. True
b. False

ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-071 - LO: 08-07
KEYWORDS: Bloom's: Remembering

2. On the balance sheet, a company reports plant assets by subtracting residual value from the original cost of the plant
asset.
a. True
b. False

ANSWER: False
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FACC.PONO.13.08-071 - LO: 08-07
KEYWORDS: Bloom's: Remembering

3. All operating assets, except land, are subject to depreciation, amortization, or depletion.
a. True
b. False

ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-071 - LO: 08-07
KEYWORDS: Bloom's: Remembering

4. Lenders are interested in the value of operating assets as collateral when making lending decisions.
a. True
b. False

ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-071 - LO: 08-07
KEYWORDS: Bloom's: Remembering

5. A company uses the same depreciation method as other firms in the same industry. Because of this, investors will have
enhanced comparability of the financial reporting results.
a. True
b. False

ANSWER: True
®
© 2017 Cengage Learning . May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

,Chapter 8: Operating Assets: Property, Plant and Equipment, and Intangibles
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-05 - LO: 08-05
FACC.PONO.13.08-071 - LO: 08-07
KEYWORDS: Bloom's: Remembering




© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

,Chapter 8: Operating Assets: Property, Plant and Equipment, and Intangibles
6. When plant assets are purchased in a group, each asset increases the respective plant asset account for its fair market
value at the time of acquisition.
a. True
b. False

ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-02 - LO: 08-02
KEYWORDS: Bloom's: Remembering

7. Acquisition cost includes all of the costs that are normal and necessary to acquire and maintain a plant asset over its
useful life.
a. True
b. False

ANSWER: False
DIFFICULTY: Moderate
LEARNING OBJECTIVES: FACC.PONO.13.08-02 - LO: 08-02
KEYWORDS: Bloom's: Remembering

8. Acquisition costs are also known as replacement costs.
a. True
b. False

ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-02 - LO: 08-02
KEYWORDS: Bloom's: Remembering

9. Acquisition cost should not include expenditures unrelated to the acquisition, like repair costs for damages incurred
during installation, or costs incurred after the asset was installed and use begun.
a. True
b. False

ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-02 - LO: 08-02
KEYWORDS: Bloom's: Remembering

10. When land and building are acquired for a lump sum, the purchase amount should be allocated on the basis of the
market values of the two assets.
a. True
b. False

ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.08-03 - LO: 08-03

© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

, Chapter 8: Operating Assets: Property, Plant and Equipment, and Intangibles
KEYWORDS: Bloom's: Remembering




© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.