ACCT 301 FINAL EXAM – LIBERTY UNIVERSITY | INTERMEDIATE FINANCIAL ACCOUNTING I
STUDY GUIDE & PRACTICE QUESTIONS 2026/2027
Types of Assets - correct answer ✔✔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 - correct answer ✔✔purchase, self
construction, donation, business combination, lease, exchange
cost of equipment includes - correct answer ✔✔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 - correct answer ✔✔b. $57,900
$48,000 (purchase price) + $2,400 (transportation costs) + $1,500 (installation and wiring) +
$6,000 (testing) = $57,900
cost of land - correct answer ✔✔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 - correct
answer ✔✔reduce
land improvements usually have lives that are - correct answer ✔✔estimable
costs are separately identified and capitalized and depreciated over periods benefited by their
use
EX: cost of parking lots, driveways, private roads, fences, and sprinkler systems
cost of building includes - correct answer ✔✔Purchase price
Realtor commissions and legal fees
Reconditioning costs
cost of natural resources include - correct answer ✔✔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 - correct answer ✔✔An existing legal obligation associated with the
disposition/retirement of a tangible, long-lived asset
GAAP requires AROs to be recognized as a liability and measured at fair value
STUDY GUIDE & PRACTICE QUESTIONS 2026/2027
Types of Assets - correct answer ✔✔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 - correct answer ✔✔purchase, self
construction, donation, business combination, lease, exchange
cost of equipment includes - correct answer ✔✔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 - correct answer ✔✔b. $57,900
$48,000 (purchase price) + $2,400 (transportation costs) + $1,500 (installation and wiring) +
$6,000 (testing) = $57,900
cost of land - correct answer ✔✔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 - correct
answer ✔✔reduce
land improvements usually have lives that are - correct answer ✔✔estimable
costs are separately identified and capitalized and depreciated over periods benefited by their
use
EX: cost of parking lots, driveways, private roads, fences, and sprinkler systems
cost of building includes - correct answer ✔✔Purchase price
Realtor commissions and legal fees
Reconditioning costs
cost of natural resources include - correct answer ✔✔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 - correct answer ✔✔An existing legal obligation associated with the
disposition/retirement of a tangible, long-lived asset
GAAP requires AROs to be recognized as a liability and measured at fair value
