ACC 201 - Chapter 9 Learning Notes (exam
3) UPDATED ACTUAL Exam Questions
and CORRECT Answers
Property, plant, and equipment (also known as plant assets) should be recorded on a company's
financial statements at ___ (historical cost or fair market value). Property, plant, and equipment
___(may, may not) be increased to fair value after it's originally recorded on a company's books.
- CORRECT ANSWER -1. historical cost
2. may not
What is another name for plant, property, and equipment? - CORRECT ANSWER -Plant
assets
A capital expenditure will increase a company's ____ (total assets, total liabilities, total revenues
or total expenses) while revenue expenditures will increase a company's ____ (total assets, total
liabilities, total revenues or total expenses). An example of a capital expenditure is _____. An
example of a revenue expenditure is______. - CORRECT ANSWER -1. total assets
2. total expenses
3. Truck, Equipment, Land, or Building
4. Oil change of a truck, window washing, Lawn mowing, or painting a room
To capitalize an expenditure means to record the expenditure as a(n): - CORRECT
ANSWER -asset
A capital expenditure when incurred will ___ a company's net income. - CORRECT
ANSWER -NOT AFFECT
A revenue expenditure when incurred will ___ a company's net income. - CORRECT
ANSWER -DECREASE
, What are the primary types of expenditures that would be included in the cost of land? -
CORRECT ANSWER -1. purchase price
2. closing costs - EX: attorney's fees
3. real estate commissions
4. property taxes - from previous years
Land ____ depreciated - CORRECT ANSWER -IS NOT
Land improvements are: - CORRECT ANSWER -a land addition that has a limited life
longer than one year.
Examples of land improvements are: - CORRECT ANSWER -Driveways, parking lots,
some types of landscaping, or sidewalks
Land improvements ____ depreciated because they have ___ lives. - CORRECT
ANSWER -1. ARE
2. Limited
What are the primary types of expenditures that would be included in the cost of buildings if the
building is purchased? - CORRECT ANSWER -1. purchase price
2. closing costs - EX: attorney's fees
3. real estate commissions
What are the primary types of expenditures that would be included in the cost of buildings if the
building is constructed? - CORRECT ANSWER -1. architects' fees
2. contract price
3. building permits
4. excavation prices
5. capitalized interests
3) UPDATED ACTUAL Exam Questions
and CORRECT Answers
Property, plant, and equipment (also known as plant assets) should be recorded on a company's
financial statements at ___ (historical cost or fair market value). Property, plant, and equipment
___(may, may not) be increased to fair value after it's originally recorded on a company's books.
- CORRECT ANSWER -1. historical cost
2. may not
What is another name for plant, property, and equipment? - CORRECT ANSWER -Plant
assets
A capital expenditure will increase a company's ____ (total assets, total liabilities, total revenues
or total expenses) while revenue expenditures will increase a company's ____ (total assets, total
liabilities, total revenues or total expenses). An example of a capital expenditure is _____. An
example of a revenue expenditure is______. - CORRECT ANSWER -1. total assets
2. total expenses
3. Truck, Equipment, Land, or Building
4. Oil change of a truck, window washing, Lawn mowing, or painting a room
To capitalize an expenditure means to record the expenditure as a(n): - CORRECT
ANSWER -asset
A capital expenditure when incurred will ___ a company's net income. - CORRECT
ANSWER -NOT AFFECT
A revenue expenditure when incurred will ___ a company's net income. - CORRECT
ANSWER -DECREASE
, What are the primary types of expenditures that would be included in the cost of land? -
CORRECT ANSWER -1. purchase price
2. closing costs - EX: attorney's fees
3. real estate commissions
4. property taxes - from previous years
Land ____ depreciated - CORRECT ANSWER -IS NOT
Land improvements are: - CORRECT ANSWER -a land addition that has a limited life
longer than one year.
Examples of land improvements are: - CORRECT ANSWER -Driveways, parking lots,
some types of landscaping, or sidewalks
Land improvements ____ depreciated because they have ___ lives. - CORRECT
ANSWER -1. ARE
2. Limited
What are the primary types of expenditures that would be included in the cost of buildings if the
building is purchased? - CORRECT ANSWER -1. purchase price
2. closing costs - EX: attorney's fees
3. real estate commissions
What are the primary types of expenditures that would be included in the cost of buildings if the
building is constructed? - CORRECT ANSWER -1. architects' fees
2. contract price
3. building permits
4. excavation prices
5. capitalized interests
