ACCT 301 - FINAL EXAM - Liberty university
questions and ANSWERS 2025-2026 UPDATE
Types of Assets -✔✔ANS Property, plant, and equipment:
Land, Buildings, Equipment, Machinery, Furniture, Autos, and Trucks
Natural resources:
Oil and Gas Deposits, Timber Tracts, and Mineral Deposits
Intangible assets:
Patents
Copyrights
Trademarks
Franchises
Goodwill
property plant and equipment can be acquired by -✔✔ANS purchase, self construction
donation, business combination, lease, exchange
cost of equipment includes -✔✔ANS Purchase price
Any sales tax
Transportation costs
Expenditures for installation and testing
Legal fees to establish title
Any other costs to bring the asset to its condition and location for use
,The sum of the above costs represent the initial amount to be capitalized (recorded as an
asset) in the balance sheet.
The following expenditures relate to equipment purchased by Symington Corporation:
Purchase price $48,000
Transportation costs 2,400
Installation and special wiring 1,500
Testing 6,000
For what amount will Symington record the purchase of equipment?
a. $51,900
b. $57,900
c. $50,800
d. $48,000 -✔✔ANS b. $57,900
$48,000 (purchase price) + $2,400 (transportation costs) + $1,500 (installation and wiring
+ $6,000 (testing) = $57,900
cost of land -✔✔ANS Purchase price
Attorney fees
Real estate agent commissions
Costs related to title and title search
Recording fees
Any back taxes, liens, mortgages, or other obligations
Proceeds from the sale of salvaged materials after purchase ________ the cost of land
✔✔ANS reduce
land improvements usually have lives that are -✔✔ANS estimable
costs are separately identified and capitalized and depreciated over periods benefited b
their use
, EX: cost of parking lots, driveways, private roads, fences, and sprinkler systems
cost of building includes -✔✔ANS Purchase price
Realtor commissions and legal fees
Reconditioning costs
cost of natural resources include -✔✔ANS If purchased: Purchase price
Any other costs necessary to bring the asset to condition and location for use
If developed: Acquisition costs
Exploration costs
Development costs
Restoration costs
asset retirement obligations -✔✔ANS An existing legal obligation associated with th
disposition/retirement of a tangible, long-lived asset
GAAP requires AROs to be recognized as a liability and measured at fair value
intangible assets -✔✔ANS Represent exclusive rights that provide benefits to the owner
Lack physical substance
Difficult to anticipate the timing and the existence of future benefits attributable to man
intangible assets
intangible assets are amortized if -✔✔ANS finite useful lives
intangible assets are not ammortized if -✔✔ANS indefinite useful lives
Right to manufacture a product or to use a process -✔✔ANS patents - last 20 years
questions and ANSWERS 2025-2026 UPDATE
Types of Assets -✔✔ANS Property, plant, and equipment:
Land, Buildings, Equipment, Machinery, Furniture, Autos, and Trucks
Natural resources:
Oil and Gas Deposits, Timber Tracts, and Mineral Deposits
Intangible assets:
Patents
Copyrights
Trademarks
Franchises
Goodwill
property plant and equipment can be acquired by -✔✔ANS purchase, self construction
donation, business combination, lease, exchange
cost of equipment includes -✔✔ANS Purchase price
Any sales tax
Transportation costs
Expenditures for installation and testing
Legal fees to establish title
Any other costs to bring the asset to its condition and location for use
,The sum of the above costs represent the initial amount to be capitalized (recorded as an
asset) in the balance sheet.
The following expenditures relate to equipment purchased by Symington Corporation:
Purchase price $48,000
Transportation costs 2,400
Installation and special wiring 1,500
Testing 6,000
For what amount will Symington record the purchase of equipment?
a. $51,900
b. $57,900
c. $50,800
d. $48,000 -✔✔ANS b. $57,900
$48,000 (purchase price) + $2,400 (transportation costs) + $1,500 (installation and wiring
+ $6,000 (testing) = $57,900
cost of land -✔✔ANS Purchase price
Attorney fees
Real estate agent commissions
Costs related to title and title search
Recording fees
Any back taxes, liens, mortgages, or other obligations
Proceeds from the sale of salvaged materials after purchase ________ the cost of land
✔✔ANS reduce
land improvements usually have lives that are -✔✔ANS estimable
costs are separately identified and capitalized and depreciated over periods benefited b
their use
, EX: cost of parking lots, driveways, private roads, fences, and sprinkler systems
cost of building includes -✔✔ANS Purchase price
Realtor commissions and legal fees
Reconditioning costs
cost of natural resources include -✔✔ANS If purchased: Purchase price
Any other costs necessary to bring the asset to condition and location for use
If developed: Acquisition costs
Exploration costs
Development costs
Restoration costs
asset retirement obligations -✔✔ANS An existing legal obligation associated with th
disposition/retirement of a tangible, long-lived asset
GAAP requires AROs to be recognized as a liability and measured at fair value
intangible assets -✔✔ANS Represent exclusive rights that provide benefits to the owner
Lack physical substance
Difficult to anticipate the timing and the existence of future benefits attributable to man
intangible assets
intangible assets are amortized if -✔✔ANS finite useful lives
intangible assets are not ammortized if -✔✔ANS indefinite useful lives
Right to manufacture a product or to use a process -✔✔ANS patents - last 20 years
