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- Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers to the process of converting assets to expenses. B. Only the purchase price of the asset is capitalized. C. Capitalizing a cost means to record it as an asset. D. Capitalizing costs results in an immediate decrease in net income.What costs are capitalized, or added to the asset account when acquiring property and equipment? A. Only the ticketed list price of the asset purchased. B. Any cost that is considered normal and necessary to get the asset into position and condition to be used. C. The lower of cost or net realizable value. D. Any of the above are allowed by U.S. GAAP as the cost to capitalize when acquiring property and equipment.The term that applies when an intangible asset is expensed over time rather than fully expensed at the time of purchase is Group of answer choices a. Depletion b. Amortization c. Goodwill write-down d. Depreciation
- Net purchase price of an asset plus all reasonable and necessary expenditures to get it in place and ready for use is known as a . Acquisition cost b . Depreciable cost Oc None of the given options • d . Cost of an assetWhat does it mean the "property and equipment are started at cost"? A. Fair value B.historical cost only C. Historical cost less accumulated depreTRUE OR FALSE? Once decided by management as an asset held for sale, management can never change its decision to revert back an asset as part of property, plant and equipment.
- Depreciation is a process of asset valuation where an asset's book value (cost less accumulated depreciation) often approximates it fair value. Do you agree or disagree? Explain why or why not.The cost basis of a given property does not include liabilities payable to the seller by the buyer because no cash changes hands. Group of answer choices True FalseTrue or False Any net income obtained from selling a depreciated property according to its last market value is considered acapital gain.
- In a replacement analysis, the market value of the currently owned asset a. does not impact the cash flows of the replacement asset(s) in the opportunity cost approach b. does not impact the cash flows of the current asset in the cash flow approach if the current asset is kept c. is treated as a salvage value for the current asset in the cash flow approach if the current asset is kept d. is added to the first cost of the replacement asset(s) in the opportunity cost approach.Which of the following statements regarding the acquisition of PP&E is false? A. For a self constructed asset, capitalized interest can exceed actual interest cost. B. If a long-lived asset is acquired and will be paid over a number of years, the time value of money should be considered. C. The general rule of PP&E valuation is to value the asset received at the fair market value of what was given up. D. The acquisition cost of land should include all things that prepared it for it's use including excavation. In interest capitalization related to self constructed assets, all of the following must occur before the capitalization window begins except: A. Expenditures for the assets have been incurred B. Depreciation of the asset being built has been recognized C. Activities that are necessary to get the asset ready for its intended use are in progress D.Interest has to be incurredwhat is Intangible Asset ? what is Wasting Assets ? what is Asset Cost ? what is Residual Value? and what are : e) Depreciation Base f) Book Value g) Historical Cost ? and also what is Basket Purchase of Non- Current Operating Assets.?
