Intermediate Accounting - Chapter 10 LearnSmart
Study online at https://quizlet.com/_92s8wn
1. Long-term assets are typically classified in one of these two categories:: prop-
erty, plant, and equipment; intangible assets
2. Which of the following items should be capitalized in the cost of equipment?-
: installation and testing of equipment, insurance on equipment during shipping, freight to deliver the equipment
to its location, purchase price, sales tax
3. Expenditures needed to get land ready for its intended use should be:: capi-
talized as part of the cost of land
4. The purchase price and all costs to bring an asset to its desired condition
and location for use should be ___________________________.: capitalized
5. The distinction between land and land improvements is that:: land has an indefinite
life
6. When a company receives an asset from an unrelated party by a donation,
the assets are valued at ________________________ value.: fair, market, appraised, or appraisal
7. When an asset is acquired by signing a noninterest-bearing note payable,
and the estimated fair value of the asset is not known, the asset should be
recorded at the fair value of the note, which is the: present value fo the note discounted at
the market rate.
8. Which of the following costs should be capitalized in the costs of acquiring
a building?: realtor commissions, remodeling building, legal fees to obtain title
9. The fixed-asset turnover ratio indicates the level of _______________________
generated by each dollar of fixed assets.: sales
10. From a financial reporting perspective, property, plant, and equipment and
intangible assets exhibit the following characteristics: long-lived, revenue-producing
11. Indicate which costs would be capitalized as part of the cost of manufactur-
ing equipment.: freight-in, insurance during transit, set-up cost
12. Sarah purchases land to be used for a new storage facility. Which of the
following items are capitalized in the cost of land?: costs to remove an old building, legal
fees to secure title, real estate agent commissions
13. A company issues its equity securities to purchase land. The common stock
is not publicly traded. The best indicator of fair value is the: appraised value of the land.
1/3
Study online at https://quizlet.com/_92s8wn
1. Long-term assets are typically classified in one of these two categories:: prop-
erty, plant, and equipment; intangible assets
2. Which of the following items should be capitalized in the cost of equipment?-
: installation and testing of equipment, insurance on equipment during shipping, freight to deliver the equipment
to its location, purchase price, sales tax
3. Expenditures needed to get land ready for its intended use should be:: capi-
talized as part of the cost of land
4. The purchase price and all costs to bring an asset to its desired condition
and location for use should be ___________________________.: capitalized
5. The distinction between land and land improvements is that:: land has an indefinite
life
6. When a company receives an asset from an unrelated party by a donation,
the assets are valued at ________________________ value.: fair, market, appraised, or appraisal
7. When an asset is acquired by signing a noninterest-bearing note payable,
and the estimated fair value of the asset is not known, the asset should be
recorded at the fair value of the note, which is the: present value fo the note discounted at
the market rate.
8. Which of the following costs should be capitalized in the costs of acquiring
a building?: realtor commissions, remodeling building, legal fees to obtain title
9. The fixed-asset turnover ratio indicates the level of _______________________
generated by each dollar of fixed assets.: sales
10. From a financial reporting perspective, property, plant, and equipment and
intangible assets exhibit the following characteristics: long-lived, revenue-producing
11. Indicate which costs would be capitalized as part of the cost of manufactur-
ing equipment.: freight-in, insurance during transit, set-up cost
12. Sarah purchases land to be used for a new storage facility. Which of the
following items are capitalized in the cost of land?: costs to remove an old building, legal
fees to secure title, real estate agent commissions
13. A company issues its equity securities to purchase land. The common stock
is not publicly traded. The best indicator of fair value is the: appraised value of the land.
1/3
