UNDERSTANDING FINANCIAL
ACCOUNTING FINAL PAPER
QUESTIONS WITH ANSWERS
GRADED A PLUS
◉ The Loss on Disposal of Equipment account is reported as Other
Losses and Expenses on the income statement. T or F? Answer: True
◉ A company purchased a machine for $100,00 many years earlier. The
accumulated depreciation on the machine is $100,000. What is true
regarding the disposal of the machine for no cash proceeds? Answer:
There will be no gain or loss on the disposal
◉ Intangible assets can have finite or infinite lives. T or F? Answer:
True
◉ Some intangible assets are not amortized T or F? Answer: True
◉ A purchaser is willing to pay for goodwill when they feel the
company they are buying from has abnormal earning power. T or F?
Answer: True
◉ The computation of depletion expense is most closely related to
which method for computing depreciation? Answer: Units-of-Production
, ◉ Which intangible asset is NOT amortized? Answer: Goodwill
◉ Amortization expense is recorded for: Answer: Intangible assets with
a finite life
◉ How does the journal entry to amortize a copyright affect the
accounting equation? Answer: Decrease assets and stockholders' equity
◉ The exclusive right to produce and sell an invention like the smart
phone requires a: Answer: Patent
◉ The depreciation process follows the ____ principle. Answer:
Expense Recognition
◉ What is not needed to measure depreciation? Answer: Market Value
◉ Depreciation method in which an equal amount of depreciation
expense is assigned to each year of the asset's use is the: Answer:
Straight-line Method
◉ The expected cash value of a plant asset at the end of its useful life is
known as the: Answer: Salvage value, residual value, and scrap value
ACCOUNTING FINAL PAPER
QUESTIONS WITH ANSWERS
GRADED A PLUS
◉ The Loss on Disposal of Equipment account is reported as Other
Losses and Expenses on the income statement. T or F? Answer: True
◉ A company purchased a machine for $100,00 many years earlier. The
accumulated depreciation on the machine is $100,000. What is true
regarding the disposal of the machine for no cash proceeds? Answer:
There will be no gain or loss on the disposal
◉ Intangible assets can have finite or infinite lives. T or F? Answer:
True
◉ Some intangible assets are not amortized T or F? Answer: True
◉ A purchaser is willing to pay for goodwill when they feel the
company they are buying from has abnormal earning power. T or F?
Answer: True
◉ The computation of depletion expense is most closely related to
which method for computing depreciation? Answer: Units-of-Production
, ◉ Which intangible asset is NOT amortized? Answer: Goodwill
◉ Amortization expense is recorded for: Answer: Intangible assets with
a finite life
◉ How does the journal entry to amortize a copyright affect the
accounting equation? Answer: Decrease assets and stockholders' equity
◉ The exclusive right to produce and sell an invention like the smart
phone requires a: Answer: Patent
◉ The depreciation process follows the ____ principle. Answer:
Expense Recognition
◉ What is not needed to measure depreciation? Answer: Market Value
◉ Depreciation method in which an equal amount of depreciation
expense is assigned to each year of the asset's use is the: Answer:
Straight-line Method
◉ The expected cash value of a plant asset at the end of its useful life is
known as the: Answer: Salvage value, residual value, and scrap value
