The period of time during which interest must be capitalized ends when The asset is abandoned, sold or fully depreciated The activities that are necessary to get the asset for its intended use have begun No further interest cost is being incurred The asset is substantially complete and ready for its intended use.

The period of time during which interest must be capitalized ends when The asset is abandoned, sold or fully depreciated The activities that are necessary to get the asset for its intended use have begun No further interest cost is being incurred The asset is substantially complete and ready for its intended use.

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Description: The period of time during which interest must be capitalized ends whenThe asset is abandoned, sold or fully depreciatedThe activities that are necessary to get the asset for its intended use have begunNo further interest cost is being incurredThe as

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 4Q

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How are intangible assets with an indefinite life treated? A. They are depreciated. B. They are amortized. C. They are depleted. D. They are tested yearly for impairment.
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 incurred
The period of time during which capitalization of interest begins and when capitalization of interest ends is Group of answer choices From the time the first expenditures are incurred and funds have been borrowed until the asset is substantially complete and ready for its intended use. From the time funds are borrowed until the asset is substantially complete and ready for its intended use. From the time the first expenditures are incurred until no further interest cost is being incurred From the time the first expenditures are incurred until activities necessary to get the asset for its intended use have begun.
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
We normally record a long-term asset at the a. Cost of the asset only.b. Cost of the asset plus all costs necessary to get the asset ready for use.c. Appraised value.d. Cost of the asset, but subsequently adjust it up or down to appraised value.
Which of the following statements if not true? a. Depreciation is the process of allocating the purchase price of an asset minues its residual value to expense, for each period benefited by the asset. b. The cost of an asset includes all acquisition costs necessary to obtain the benefits to be derived from the asset. c. The service life of an asset is the measure of the number of years of service expected from the asset before its disposal. d. The residual value of an asset is the difference between the expected book value of the asset at the end of its service and the cost of disposal.
Which of the following best describes depreciation? A.ccounts for the market value of a physical asset B.Part of the cost of a physical asset allocated as an expense to each time period in which the asset is used. C.Shows the increase in value of a physical asset over the asset’s useful life D.Shows the drop in value of an asset when the asset is first used by an entity
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
What is the effective life of an asset? a. The total period of ownership of the asset, including when it is not installed and ready for use.. b. The period prior to the asset being abandoned or scrapped. c. The period that the asset can be used for income-producing purposes. d. All of the above.
True or False: Regardless of the depreciation method used, the book value of a tangible long-term asset at the end of its useful life should equal the asset’s residual value.
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
What element must be present when determining if an asset is a depreciating asset? a. An asset that holds its value for a period of time or increases in value for a period. b. An asset that has a limited effective life. c. A fixture that completely loses its value. d. An asset that cannot reasonably be expected to decline in value over time.