ACCO 310 Final Mock Exam #2
ACCO 310 Final Mock Exam #2 Financial Accounting 2025-2026 Concordia
University
QUESTION 1
1) Peter exchanged similar assets with Sunshine Company in a transaction without commercial
substance. Peter gave up equipment that had a net book value of $49,000 (fair value $51,000) and
Sunshine exchanged equipment with a net book value of $38,000 (fair value $37,000). What is the
correct value at which Sunshine should record the new equipment?
A) $37,000
B) $38,000
C) $49,000
D) $51,000
2) Francisco purchased a machine on January 1, 2012 for $600,000. Francisco estimated a useful life of
10 years and residual value of $10,000. The company uses straight-line depreciation. The machine was
sold on December 31, 2014 for $350,000. What was the gain/loss on disposal of the machine?
A) $70,000 loss.
B) $70,000 gain.
C) $73,000 loss.
D) $73,000 gain.
3) What costs should not be capitalized to 'building'?
A) Demolition of old structures.
B) Engineering surveys.
C) Interest during construction.
D) Construction permits.
4) Castle Rock owns a machine that it purchased on January 1, 2013 for $400,000. The machine had an
estimated useful life of 10 years with a production capacity for 80,000 units. The company uses the
units-of-production method to record depreciation. The machine produced 15,000 units in 2013, 18,000
units in 2014 and 25,000 units in 2015. What was the depreciation expense for 2015?
, ACCO 310 Final Mock Exam #2
A) $39,000
B) $40,000
C) $90,000
D) $125,000
5) What is the effect of overstating 2015 depreciation expense?
A) Accumulated depreciation will be understated for 2015.
B) Net income for 2015 will be overstated.
C) Ending retained earnings for 2015 will be understated.
D) Ending retained earnings for 2015 will be overstated.
6) Which goods in transit would be recorded in inventory at year end?
A) Goods sold with terms FOB destination point that were shipped at year end.
B) Goods sold with terms FOB shipping point that were shipped before year end.
C) Goods purchased FOB destination that have not been received by year-end.
D) Goods returned for credit before year-end, with terms FOB shipping point
1
ACCO 310 Final Mock Exam #2 Financial Accounting 2025-2026 Concordia
University
QUESTION 1
1) Peter exchanged similar assets with Sunshine Company in a transaction without commercial
substance. Peter gave up equipment that had a net book value of $49,000 (fair value $51,000) and
Sunshine exchanged equipment with a net book value of $38,000 (fair value $37,000). What is the
correct value at which Sunshine should record the new equipment?
A) $37,000
B) $38,000
C) $49,000
D) $51,000
2) Francisco purchased a machine on January 1, 2012 for $600,000. Francisco estimated a useful life of
10 years and residual value of $10,000. The company uses straight-line depreciation. The machine was
sold on December 31, 2014 for $350,000. What was the gain/loss on disposal of the machine?
A) $70,000 loss.
B) $70,000 gain.
C) $73,000 loss.
D) $73,000 gain.
3) What costs should not be capitalized to 'building'?
A) Demolition of old structures.
B) Engineering surveys.
C) Interest during construction.
D) Construction permits.
4) Castle Rock owns a machine that it purchased on January 1, 2013 for $400,000. The machine had an
estimated useful life of 10 years with a production capacity for 80,000 units. The company uses the
units-of-production method to record depreciation. The machine produced 15,000 units in 2013, 18,000
units in 2014 and 25,000 units in 2015. What was the depreciation expense for 2015?
, ACCO 310 Final Mock Exam #2
A) $39,000
B) $40,000
C) $90,000
D) $125,000
5) What is the effect of overstating 2015 depreciation expense?
A) Accumulated depreciation will be understated for 2015.
B) Net income for 2015 will be overstated.
C) Ending retained earnings for 2015 will be understated.
D) Ending retained earnings for 2015 will be overstated.
6) Which goods in transit would be recorded in inventory at year end?
A) Goods sold with terms FOB destination point that were shipped at year end.
B) Goods sold with terms FOB shipping point that were shipped before year end.
C) Goods purchased FOB destination that have not been received by year-end.
D) Goods returned for credit before year-end, with terms FOB shipping point
1
