Test 1 Essay

874 WordsFeb 19, 20144 Pages
FILL-IN-THE-BLANK—PRINCIPLES AND TERMINOLOGY—30% INSTRUCTIONS: Complete each of the following statements by writing the appropriate words in the Answers column. For Scoring STATEMENTS Answers 0. The depreciation method that varies the amount of depreciation with the asset’s usage is called units-of-production 0. ____ 1–3. Three factors taken into consideration when depreciation expense is calculated are: 1. _________________________, 1. ____ 2. _________________________, and 2. ____ 3. _________________________. 3. ____ 4. Costs that are chargeable to an asset account or its related accumulated depreciation account are termed 4. ____ 5. Cost of an asset minus its accumulated depreciation is called 5. ____ 6. Long-lived assets that are useful in the operations of a business, not held for sale, and represent legal rights are usually classified on the balance sheet as 6. ____ 7–9. The following expenditures are related to land acquired for use by a business. Indicate the account that should be debited for each expenditure. 7. Cost of paving parking areas 7. ____ 8. Cost of razing unwanted building 8. ____ 9. Legal fees paid in purchasing land 9. ____ 10–13. The following expenditures are related to equipment acquired for use by a business. Indicate the account that should be debited for each expenditure. 10. Cost of vandalism on the equipment during installation 10. ____ 11. Special foundation 11. ____ 12. New parts to replace those damaged in installation 12. ____ 13. Installation costs 13. ____ 14. A patent is referred to as a(n) 14. ____ 15. The expense account for consuming natural resources is 15. ____ PROBLEM 1—PROBLEMS—22% INSTRUCTIONS: Solve each of the following problems and record the answers in the Answers column.

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