Initial operating loss related to Property, Plant and Equipment should be A. Capitalized as part of the cost of plan B. Deferred and amortized over a reasonable period C. Expensed and charged to the income statement D. Charge to retained earnings

Initial operating loss related to Property, Plant and Equipment should be A. Capitalized as part of the cost of plan B. Deferred and amortized over a reasonable period C. Expensed and charged to the income statement D. Charge to retained earnings

Name: Initial operating loss related to Property, Plant and Equipment should
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Description: Initial operating loss related to Property, Plant and Equipment should beA. Capitalized as part of the cost of planB. Deferred and amortized over a reasonable periodC. Expensed and charged to the income statementD. Charge to retained earnings

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 16CYBK: Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived...

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Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle? a. Revenue b. Depreciation expense c. Gain on disposal d. Equipment
Depreciation of a plant asset is the process of ________. A. asset valuation for statement of financial position purposes B. allocation of the assets cost to the periods of use C. fund accumulation for the replacement of the asset D. asset valuation based on current replacement cost data
Income earned from incidental operations before an asset is put to use is: deducted from the cost of the asset added to the cost of the asset immediately recognized in P/L together with related expense ignored
Accumulated Depreciation appears on the... Select one: a. balance sheet in the long-term liabilities section b. income statement as an operating expense c. balance sheet in the property, plant, and equipment section d. balance sheet in the current assets section
Accumulated Depreciation appears on the a.balance sheet in the Long-Term Liabilities section b.balance sheet in the Property, Plant, and Equipment section c.balance sheet in the Current Assets section d.income statement as an operating expense
The accounting treatment for depreciation expense in the balance sheet will be: a. Added to the corresponding long term liability b. Added to the corresponding non-current asset c. Deducted from the corresponding long term liability d. Deducted from the corresponding non-current asset
Assets classified as property, plant, and equipment are reported at a. each asset’s estimated market value at the balance sheet date. b. each asset’s estimated salvage value at the balance sheet date. c. the estimated depreciable cost at the balance sheet date. d. each asset’s original cost less depreciation since acquisition.
The amount of asset cost assigned as an expense to a particular period is called: a. Depreciation b. Reserves c. Loss of credit d. Provisions
An impairment loss for long-lived assets which are to be held and used should be reported on the income statement as a(n) a. Extraordinary item . b. Component of the income or loss from the operations of a discontinued segment. c. Cumulative effect of a change in accounting principle . d. Component of income from continuing operations before income taxes.
Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable asset
What is the purpose of charging depreciation in financial statements? A To allocate the cost of a non-current asset over the accounting periods expected to benefit from its use B To ensure that funds are available for the eventual replacement of the asset C To reduce the cost of the asset in the statement of financial position to its estimated market value D To account for the ‘wearing-out’ of the asset over its life
Net book value is Select one: a. Amount of which an asset is recognized in the balance sheet after deducting any accumulated depreciation. b. Net amount which the entity expects to obtain for an asset at the end of its useful life. c. Amount of cash or cash equivalent paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction. d. Cost of an asset or the amount substituted for cost in the financial statements, less its residual value