?
D?
VE
RO
PP
_A
IA
UV
ST
, TABLE OF CONTENTS
Test Bank: Fundamental Accounting Principles 2, 18th Canadian
Edition
Authors: Kermit Larson, Heidi Dieckmann, John Harris, Erin Creagh
ST
Chapter 9: Property, Plant, and Equipment and Intangibles
UV
Chapter 10: Current Liabilities
Chapter 11: Partnerships
Chapter 12: Organization and Operation of Corporations
IA
Chapter 13: Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings
Chapter 14: Bonds and Long-Term Notes Payable
_A
Chapter 15: Accounting for Debt and Share Investments
Chapter 16: Reporting and Analyzing Cash Flows
Chapter 18: Analyzing Financial Statements
PP
RO
VE
D?
?
, Chapter G Property, Plant, and Equipment and Intangibles
Student name:
1) Property, plant and equipment are assets held for sale.
⊚ true
⊚ false
ST
2) Non-current assets can be divided into two groups including tangible and intangible assets.
UV
These assets are generally used in operations of a business and have useful lives extending
over more than one accounting period.
⊚ true
⊚ false
IA
3) Land purchased as a building site is a tangible asset called property, plant and equipment and
is classified under the "Long-term Investments" section on the balance sheet.
_A
⊚ true
⊚ false
PP
4) The cost of an asset includes all normal and reasonable expenditures necessary to get the
asset in place and ready for its intended use.
⊚ true
⊚ false
RO
5) If a machine is damaged during unpacking, the repairs are added to its cost.
⊚ true
VE
⊚ false
6) To be charged to and reported as part of the cost of property, plant and equipment, an
D?
expenditure must be normal, reasonable, and necessary in preparing the asset for its intended
use.
⊚ true
⊚ false
?
, Chapter G Property, Plant, and Equipment and Intangibles
7) The purchase of real estate that includes land, building, and land improvements is called a
lump-sum purchase.
⊚ true
⊚ false
ST
8) Any expenditures for legal fees, surveying, and accrued property taxes should not be
included in the cost of land.
UV
⊚ true
⊚ false
IA
9) SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to
Store Building.
⊚ true
_A
⊚ false
10) The cost principle requires that an asset be recorded at the cash or cash equivalent amount
PP
given in exchange.
⊚ true
⊚ false
RO
11) Subsequent expenditures are purchases made after the acquisition of equipment to operate,
maintain, repair, and improve it.
⊚ true
VE
⊚ false
12) Because land has unlimited life, it is not subject to depreciation. Therefore, items that
D?
increase the usefulness of the land such as parking lots are also not depreciated.
⊚ true
⊚ false
?
D?
VE
RO
PP
_A
IA
UV
ST
, TABLE OF CONTENTS
Test Bank: Fundamental Accounting Principles 2, 18th Canadian
Edition
Authors: Kermit Larson, Heidi Dieckmann, John Harris, Erin Creagh
ST
Chapter 9: Property, Plant, and Equipment and Intangibles
UV
Chapter 10: Current Liabilities
Chapter 11: Partnerships
Chapter 12: Organization and Operation of Corporations
IA
Chapter 13: Corporate Reporting: Profit, Earnings Per Share, and Retained Earnings
Chapter 14: Bonds and Long-Term Notes Payable
_A
Chapter 15: Accounting for Debt and Share Investments
Chapter 16: Reporting and Analyzing Cash Flows
Chapter 18: Analyzing Financial Statements
PP
RO
VE
D?
?
, Chapter G Property, Plant, and Equipment and Intangibles
Student name:
1) Property, plant and equipment are assets held for sale.
⊚ true
⊚ false
ST
2) Non-current assets can be divided into two groups including tangible and intangible assets.
UV
These assets are generally used in operations of a business and have useful lives extending
over more than one accounting period.
⊚ true
⊚ false
IA
3) Land purchased as a building site is a tangible asset called property, plant and equipment and
is classified under the "Long-term Investments" section on the balance sheet.
_A
⊚ true
⊚ false
PP
4) The cost of an asset includes all normal and reasonable expenditures necessary to get the
asset in place and ready for its intended use.
⊚ true
⊚ false
RO
5) If a machine is damaged during unpacking, the repairs are added to its cost.
⊚ true
VE
⊚ false
6) To be charged to and reported as part of the cost of property, plant and equipment, an
D?
expenditure must be normal, reasonable, and necessary in preparing the asset for its intended
use.
⊚ true
⊚ false
?
, Chapter G Property, Plant, and Equipment and Intangibles
7) The purchase of real estate that includes land, building, and land improvements is called a
lump-sum purchase.
⊚ true
⊚ false
ST
8) Any expenditures for legal fees, surveying, and accrued property taxes should not be
included in the cost of land.
UV
⊚ true
⊚ false
IA
9) SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to
Store Building.
⊚ true
_A
⊚ false
10) The cost principle requires that an asset be recorded at the cash or cash equivalent amount
PP
given in exchange.
⊚ true
⊚ false
RO
11) Subsequent expenditures are purchases made after the acquisition of equipment to operate,
maintain, repair, and improve it.
⊚ true
VE
⊚ false
12) Because land has unlimited life, it is not subject to depreciation. Therefore, items that
D?
increase the usefulness of the land such as parking lots are also not depreciated.
⊚ true
⊚ false
?
