ACC 291T Wk 5 - Practice: Connect Knowledge Check (2021.7 New)

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ACC 291T Wk 5 - Practice: Connect Knowledge Check (2021.7 New)

A company had a tractor destroyed by fire. The tractor originally cost $85,000 with accumulated depreciation of $60,000. The proceeds from the insurance company were $20,000. The company should recognize:

Multiple Choice

A loss of $20,000.

A gain of $65,000.

A gain of $20,000.

A gain of $5,000.

A loss of $5,000.

Amortization is:

Multiple Choice

The process of allocating the cost of natural resources to periods when they are consumed.

Also called depletion.

An accelerated form of expensing an asset's cost.

The systematic allocation of the cost of an intangible asset to expense over its estimated useful life.

A company purchased equipment valued at $66,000. It traded in old equipment for a $9,000 trade-in allowance and the company paid $57,000 cash with the trade-in. The old equipment cost $44,000 and had accumulated depreciation of $36,000. This transaction has commercial substance. What is the recorded value of the new equipment?

Multiple Choice

$9,000.

$8,000.

$57,000.

$66,000.

$65,000.

Depletion is:

Multiple Choice

Calculated using the double-declining balance method.

The process of allocating the cost of natural resources to the period when it is consumed.

The process of allocating the cost of intangibles to periods when they are used.

An increase in the value of a natural resource when incurred.

Also called amortization.

The useful life of a plant asset is:

Multiple Choice

Never related to its physical life.

The length of time it is productively used in a company's operations.

Determined by law.

Its productive life, but not to exceed one year.

Determined by the FASB.

Which of the following is an example of an extraordinary repair?

Multiple Choice

Routine machine maintenance.

Carpet cleaning and repair.

Replacement of all florescent light tubes in an office.

New tires for a truck.

Replacing the roof on a manufacturing warehouse.