Test Bank Fundamental Accounting Principles (Volume 2) 18th Canadian Edition By Kermit Larson, Heidi Dieckmann, John Harris, Erin Creagh

Test Bank Fundamental
Accounting Principles 18th
Canadian Edition (Volume 2) By
Kermit Larson, Heidi Dieckmann,
John Harris, Erin Creagh (All
Chapters 9-17, 100% Original
Verified, A+ Grade)
This is The Only Original and
Complete Test Bank for 18th
Canadian Edition (Volume 2), All
Other Files in the Market are
Fake/Old/Wrong Edition.
Includes MCQs and True False
Answer at the end of each Chapter.

,Chapter 9 Property, Plant, and Equipment and Intangibles


Student name:__________
1) Property, plant and equipment are assets held for sale.
⊚ true
⊚ false



2) Non-current assets can be divided into two groups including tangible and intangible assets.
These assets are generally used in operations of a business and have useful lives extending
over more than one accounting period.
⊚ true
⊚ false



3) Land purchased as a building site is a tangible asset called property, plant and equipment and
is classified under the "Long-term Investments" section on the balance sheet.
⊚ true
⊚ false



4) The cost of an asset includes all normal and reasonable expenditures necessary to get the
asset in place and ready for its intended use.
⊚ true
⊚ false



5) If a machine is damaged during unpacking, the repairs are added to its cost.
⊚ true
⊚ false



6) To be charged to and reported as part of the cost of property, plant and equipment, an
expenditure must be normal, reasonable, and necessary in preparing the asset for its intended
use.
⊚ true
⊚ false

,Chapter 9 Property, Plant, and Equipment and Intangibles


7) The purchase of real estate that includes land, building, and land improvements is called a
lump-sum purchase.
⊚ true
⊚ false



8) Any expenditures for legal fees, surveying, and accrued property taxes should not be
included in the cost of land.
⊚ true
⊚ false



9) SportsWorld spent $17,000 to remodel its store. This cost will be recognized with a debit to
Store Building.
⊚ true
⊚ false



10) The cost principle requires that an asset be recorded at the cash or cash equivalent amount
given in exchange.
⊚ true
⊚ false



11) Subsequent expenditures are purchases made after the acquisition of equipment to operate,
maintain, repair, and improve it.
⊚ true
⊚ false



12) Because land has unlimited life, it is not subject to depreciation. Therefore, items that
increase the usefulness of the land such as parking lots are also not depreciated.
⊚ true
⊚ false

, Chapter 9 Property, Plant, and Equipment and Intangibles


13) Depreciation is the process of allocating the cost of a tangible asset in a rational and
systematic manner over the asset's estimated useful life.
⊚ true
⊚ false



14) Residual value is an estimate of an asset's value at the end of its useful life.
⊚ true
⊚ false



15) Inadequacy refers to the condition where the capacity of a property, plant and equipment
item is too small to meet the company's productive demands.
⊚ true
⊚ false



16) Depreciation should always be recorded as soon as an asset is purchased.
⊚ true
⊚ false



17) Depreciation measures the decline in market value of an asset.
⊚ true
⊚ false



18) On the balance sheet, it is not necessary to report both the cost and the accumulated
depreciation of an asset.
⊚ true
⊚ false



19) Accumulated depreciation represents funds set aside to buy new assets when the assets
currently owned are replaced.
⊚ true
⊚ false