Questions from Financial Accounting

Q: A capital expenditure a. is expensed immediately. b

A capital expenditure a. is expensed immediately. b. is a credit like capital (owners’ equity). c. adds to an asset. d. records additional capital.

Q: Which of the following items should be accounted for as a capital

Which of the following items should be accounted for as a capital expenditure? a. Costs incurred to repair leaks in the building roof b. Maintenance fees paid with funds provided by the company’s ca...

Q: Suppose you buy land for $3,000,000 and

Suppose you buy land for $3,000,000 and spend $1,500,000 to develop the property. You then divide the land into lots as follows: How much did each Hilltop lot cost you? a. $60,000 b. $50,000 c. $5...

Q: Which statement about depreciation is false? a. Depreciation is

Which statement about depreciation is false? a. Depreciation is a process of allocating the cost of an asset to expense over its useful life. b. A major objective of depreciation accounting is to al...

Q: At the beginning of last year, Brentwood Corporation purchased a piece

At the beginning of last year, Brentwood Corporation purchased a piece of heavy equipment for $88,000. The equipment has a life of five years or 100,000 hours. The estimated residual value is $8,000....

Q: Tulsa Corporation acquired a machine for $27,000 and has

Tulsa Corporation acquired a machine for $27,000 and has recorded depreciation for two years using the straight-line method over a five-year life and $9,000 residual value. At the start of the third...

Q: Kline Company failed to record depreciation of equipment. How does this

Kline Company failed to record depreciation of equipment. How does this omission affect Kline’s financial statements? a. Net income is understated and assets are overstated. b. Net income is oversta...

Q: Acton, Inc., uses the double-declining-balance method

Acton, Inc., uses the double-declining-balance method for depreciation on its computers. Which item is not needed to compute depreciation for the first year? a. Estimated residual value b. Expected u...

Q: Which of the following costs are reported on a company’s income statement

Which of the following costs are reported on a company’s income statement and balance sheet? Income statement……………………………Balance sheet a. Cost of goods sold………...Accumulated depreciation b. Accumulated...

Q: Hamilton Company purchased a machine for $11,800 on January

Hamilton Company purchased a machine for $11,800 on January 1, 2016. The machine has been depreciated using the straight-line method over a four-year life with a $1,600 residual value. Hamilton sold t...